1. The Purse Company produces a line of purses. The manager, Sally Smith, is interested in using a level aggregate plan. Inventories and back orders will be used to handle demand fluctuations. She has asked you to develop such a plan.

Use the following data to solve the first seven problems.
Problem Data
Cost data
Regular-time labor cost per hour	$17.00
Overtime labor cost per hour	$21.00
Subcontracting cost per unit (labor only)	$80.00
Holding cost per unit per period	$13.00
Back-order cost per unit per period	$20.00
Hiring cost per employee	$550.00
Firing cost per employee	$400.00
Capacity data
Beginning workforce	300 employees
Beginning inventory	600 units
Labor standard per unit	8 hours
Regular time available per period	200 hours
Overtime available per period	35 hours
Subcontracting maximum per period	1200 units
Subcontracting minimum per period	600 units
Demand data
Period 1	6000 units
Period 2	5000 units
Period 3	8000 units
Period 4	6000 units
Period 5	7000 units
Period 6	5000 units

1. Show what would happen if this plan were implemented.
2. Evaluate the plan in terms of cost, customer service, operations, and human resources.