DAT, Inc., needs to develop an aggregate plan for its product line.

Relevant data are Production time 1 hour per unit Beginning inventor y

500 units Average labor cost

$10 per hour Safety stockOne-half mont h

Workweek 5 days, 8 hours each day Backorder cost

$20 per unit per mont h

Days per month Assume 20 workdays per month Carrying cost

$5 per unit per mont h

The forecast for next year is Management prefers to keep a constant workforce and production level, absorbing variations in demand through inventory excesses and shortages. Demand not met is carried over to the following month.

Develop an aggregate plan that will meet the demand and other conditions of the problem. Do not try to find the optimum; just find a good solution and state the procedure you might use to test for a better solution. Make any necessary assumptions. (Answer in Appendix E)

W101