Sitting on Maggie Brumfields desk is the latest planned order report (shown below) from the companys MRP system. Maggies job is to determine if there is enough capacity to handle the workload and to level the load if its uneven. She gathers the latest cost figures and gets to work. Subcontracting and hiring extra workers are not options at this point, but overtime, pulling work ahead, and postponing work are. Regular production costs $10 an hour and is limited to 40 hours a week. Overtime costs $15 an hour and cannot exceed 40 extra hours (i.e., a double shift). An inventory cost of $3 per period is assessed for each hours worth of work performed in advance. Postponing work costs $20 per period for each hour of work postponed.

PLANNED ORDER REPORT

		Week
Item		1		2		3		4
A		90
B		100				250
C				600				160
D		60

PROCESSING TIMES

Item		Setup Time (min)			Run Time (min per unit)
A		15			3
B		30			15
C		50			10
D		45			4

Completely level the load by working the same number of hours each period. What is the total cost?

Economically level the load by assigning work that meets demand at the lowest possible cost. How much money is saved by economically leveling the load (What is the total cost?)?