Question: 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
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 and and again in period as can be seen from the following forecasts:
tablePeriodTotalForecast
The department now has fulltime employees, each of whom can produce units of output per period at a cost of $ per unit. Inventory carrying cost is $ per unit per period, and backlog cost is $ per unit per period. The manager is considering a plan that would involve hiring two extra employees to start working in period with one of them being on a temporary basis and would work only through period Determine the total cost of the plan, including production, inventory, and backorder costs.
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