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The planner at a company that makes garden tractors is about to prepare an aggregate production plan that will cover the next 6 months. She

The planner at a company that makes garden tractors is about to prepare an aggregate production plan that will cover the next 6 months. She has collected the following information:

Month

Demand Forecast Above the available capacity through permanent workforce

1

1,000

2

1,000

3

2,000

4

3,000

5

4,000

6

1,000

Total:

12,000

Production per month = 20 units per worker

Initial inventory = 500 units

Desired ending inventory (at the end of month 6) = 0 units

Cost:

              Hire cost = $500 per temporary worker

              Inventory = $10 per tractor per month

              Backorder = $150 per tractor per month

The optimum aggregate plan is:

Month

1

2

3

4

5

6

Total

Forecast Demand above regular capacity

1,000

1,000

2,000

3,000

4,000

1,000

12,000

# of temporary workers required

50

50

100

150

200

50

Temp. Workers hired

25

25

50

75

0

0

Temp. workers laid off

0

0

0

0

0

125

Temp. Total workers

25

50

100

175

175

50

Output

500

1,000

2,000

3,500

3,500

1,000

11,500

0

1. What is the ending inventory in Month 1?

2. What is the total cost in Month 1?

3. What is the total cost in Month 2?

4. What is the total cost in Month 2?

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