Reagan Health Foods Inc. is a fictional producer of protein drinks. The company’s production planner has developed the following demand forecast (in cases) for the first 6 months of 2016: 3,500; 4,600; 5,800; 7,600; 6,700; and 4,700, as well as the following cost data (in U.S. dollars):

Regular time cost: $15 per case.

Overtime cost: $22 per case.

Subcontracting cost: $25 per case.

Inventory carrying cost: $2 per case per month.

Backlog cost: $10 per case per month.

Using this information, develop aggregate plans for the following three scenarios and compute the total cost of each plan:

1. Use a level production strategy and use overtime when needed.

2. Use a combination of overtime, inventory, and subcontracting to absorb demand variations. Use a maximum of 600 cases of overtime and 400 cases of subcontracting.

3. Use a combination of overtime (700 cases maximum), inventory, and backlogs (if necessary). There should be no backlogs at the end of the planning period.