Refer to Example 1. Suppose that the regular output rate will drop to 290 units per period due to an expected change in production requirements. Costs will not change. Prepare an aggregate plan and compute its total cost for each of these alternatives:

a. Use overtime at a fixed rate of 20 units per period as needed. Plan for an ending inventory of zero for period 6. Backlogs cannot exceed 90 units per period.

b. Use subcontracting at a maximum rate of 50 units per period; the usage need not be the same in every period. Have an ending inventory of zero in the last period. Again backlogs cannot exceed 90 units in any period. Compare these two plans.