A large Billings, MT feed mill Longhorn Processing, prepares its 6-month aggregate plan by forecasting demand for 50-LB bags of cattle feed as follows: January, 1,350 bags; February 1,500; March 1,650; April 1,550; May 2,100; and June 1,500. The feed mill plans to begin the new year with 100 bags of beginning inventory left over from the previous month, and backorders are permitted at a cost of $4.75 per bag. Overtime capacity is set at 150 bags per month until April, at which time it will increase to 350 bags per month (May & June). A friendly competitor in Grand Forks, ND is also available as a backup source (subcontractor) to meet demand but can provide only 300 bags per month during the 6-month period. Cost on regular time per bag is $13.25; Overtime cost is $6.25 extra; subcontracting cost $22.50. Carrying cost is 3.50 per bag. Previous quarter's output was 900 bags. If Longhorn decides to hire or layoff, the costs would be $27.00 & $41.00 per bag respectively.

a. Utilizing a Chase strategy (vary the workforce), based on the current period, what is the total cost of the plan? [ Select ] ["$193,763", "$185,820", "$191,228", "$186,427", "$210,710"] Was there a need to hire, if so how many units and what was the cost? [ Select ] ["there was no need to hire, based on regular time production", "1,300, $35,100", "650, $25,400", "700, $28,700", "75, $9,500"]

b. Utilizing a mixed strategy with a level production rate of 1,400 units, then utilizing overtime, if needed (refer to the capacity limits). What is the cost of this plan? [ Select ] ["$148,088", "$134,838", "$122,892", "$127,993", "$115,567"] What there a need to backorder? [ Select ] ["yes, 650 units", "yes, 200 units", "no, based on demand levels being met with utilizing subcontracting", "yes, 150 units", "no, based on utilizing O.T."]

c. Utilize a mixed strategy at the minimum period demand forecast over the 6-month period, then utilize the subcontractor, if needed. What is the cost of this plan? [ Select ] ["$150,348", "$148,450", "$151,492", "$144,562", "$149,263"] How much cost was contributed to utilizing subcontracting? [ Select ] ["$1,150", "$22.50", "$25,875", "$22,425", "$15,783"]

d. Based on evaluating the 3 planning options, which choice should be made?