Bioway, Inc., a manufacturer of medical supplies, uses aggregate planning to set labor and inventory levels for the year. While a variety of items are produced, a standard kit composed of basic supplies is used for planning purposes. Demand varies with seasonal illnesses and the quarterly ordering policies of hospitals. The average worker at Bioway can produce 1000 kits a month at a cost of $9 per kit during regular production hours and $10 a kit during overtime production. Completed kits can also be purchased from outside suppliers at $12 each. Inventory carrying costs are $2 per kit per month. Overtime is limited to regular production, but subcontracting is unlimited. Due to high quality standards and extensive training, hiring and firing costs are $1500 per worker. Bioway currently employs 25 workers. Given the demand forecast below, develop a six-month aggregate production plan for Bioway using
(a) Chase demand
(b) A mixed strategy where the current workforce is kept for April through August, and supplemented with overtime and subcontracting as needed.
Month Demand
April ...........60,000
May ............22,000
June ............15,000
July ............46,000
August ..........80,000
September .........15,000