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 department has 20 full time employees each of whom produces 10 units of output per period at a cost of $6 per unit. Beginning inventory of period 1 is zero. Inventory carrying cost is $5 per unit per period and backlog cost is $10 per unit per period.
| Period | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
| Forecast | 190 | 230 | 260 | 280 | 210 | 170 | 160 | 260 | 180 |
Determine the total cost of the plan, including production, inventory and backorder costs.
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