A manager is attempting to put together an aggregate plan for the coming nine months. She has obtained a forecast of expected demand for the planning horizon. The plan must deal with highly seasonal demand; demand is relatively high in periods 3 and 4, and again in period 8, as can be seen from the following forecasts.

The department now has 20 full-time employees, each of whom produces 10 units of output per period at a cost of $6 per unit. Beginning inventory for period 1 is zero. Inventory carrying cost is $5 per unit per period, and backlog cost is $10 per unit per period.

a. Will the current workforce be able to handle the forecast demand?

b. Determine the total cost of the plan, including production, inventory, and backorder costs.

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Period Forecast 190 1 2 230 3 260 4 280 5 6 7 8 210 170 160 260 9 180 Total 1,940