A fabric mill has developed the following forecasts (in hundred bolts of cloth). The mill has a normal capacity of 275 units (a unit equals one hundred bolts) per month, and employs 275 workers. Regular labour cost is $2,000 per unit and overtime labour cost is $3,000 per unit. Up to 50 units per month can be made during overtime. The beginning inventory is zero. Hiring cost is $1,500 per worker. The inventory holding cost is $1,000 per unit per month, and back-order cost is $5,000 per unit per month.

a. Develop a level output/workforce plan.

b. Starting with your answer to part a, use trade-off analysis to find the minimum cost plan.

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Month 2 4 5 6 7 Total 1 Forecast 250 300 250 300 280 275 270 1,925