General Food Stuffs packages a variety of breakfast cereals and snack bars, which it aggregates as simply units of sale when doing medium-term planning. General Food Stuffs has created the following aggregate plan for the next 6 months:

General Food Stuffs can produce up to 30,000 units of sale a month in regular time, when production costs are only $1.50 per unit of sale. When General Food Stuffs plans to exceed 30,000 units of sale produced in a single month, all units of sale in excess of 30,000 must be produced in overtime production at a cost of $2.50 per unit of sale. General Food Stuffs actually has 5,000 units of sale available in inventory at the start of month 1, and it will cost $0.50 to hold one unit of sale for 1 month.

a. What is the ending inventory for month 3 in this plan?

b. What is the average inventory for month 5 in this plan?

c. Logically, what is the total amount that General Food Stuffs plans to produce in overtime production in this plan?

d. Assuming that General Food Stuffs calculates inventory holding costs based on ending inventory levels, what is the total cost of this plan?

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Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Forecast (units 25,000 35,000 15,000 5,000 5,000 20,000 of sale) Overall 35,000 40,000 0 10,000 0 20,000 production Ending inventory Regular time production Overtime production