3.2 T & K Distribution is a distributor of herbal medicines. It imports herbal medicines in bulk and repackage them for sale to retail stores. Each worker can package 1000 bottles of herbal medicines a day. The inventory holding cost and backlog cost are $1 and $2 per month per bottle, respectively. The company has 20 employees; each of them earns $2000 a month. The demand (in thousands of bottles) and number of working days for the January to June period are shown as follows:

Month January February March April May June Demand 400 400 620 520 420 400 Working days 24 23 27 24 26 26 W

ith current workforce, develop an aggregate plan when no backlogs are allowed. Will T & K Distribution save money by allowing backlogs?