Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following cost data and demand forecast:

Quarter	Forecast
1	1,900
2	1,100
3	1,500
4	800

Costs/Other Data

Previous quarter's

output =1,200 cases

Beginning

inventory=0 cases

Stockout cost of

backorders =$160 per case

Inventory holding

cost =$40 per case at end of quarter

Hiring employees = $35 per case

Terminating employees=$80 per case

Subcontracting

cost=$65 per case

Unit cost on regular time=$30 per case

Overtime cost=$10 extra per case

Capacity on regular time=1,900 cases per quarter

John's job is to develop an aggregate plan. The three initial options he wants to evaluate are:

bullet

Plan

A:

a strategy that hires and fires personnel as necessary to meet the forecast.

bullet

Plan

B:

a level strategy.

bullet

Plan

C:

a level strategy that produces

1 comma 0001,000

cases per quarter and meets the forecast demand with inventory and subcontracting.

a) Which strategy is the lowest-cost plan?

Try hiring and layoffs (to meet the forecast) as necessary(enter your responses as whole numbers).

Hiring and Layoff Plan

Quarter

Forecast

Production

Hire

(Units)

Layoff

(Units)

1 comma 2001,200

1

1 comma 9001,900

a)FIND CHART FOR ALL QUATERS

B) total costs $$$$___ (enter as whole number)

C) find the steady production as the average forecasts = ____case (whole number)

e) as employment holds steady in production 1

hiring?

Layoffs?

costs?

F) Then CONDUCT A LEVEL PLAN

G) Total costs

Finally, construct the Level plan that holds employment steady at

1,000 plus subcontracting.

subcontract in quarter 1= _____cases?

I) Conduct final level plan with the subcontract

J) Total costs?_________________

All as whole numbers!!!

Thank you!