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. Calculate the aggregate production rate.

2. Calculate the appropriate workforce given the aggregate production rate. If Sally will need to hire workers, include this.

3. Show what would happen if this plan were implemented.

4. Evaluate the plan in terms of cost, customer service, operations, and human resources.