ABC Precision Limited manufactures more than 100 different precision gears. Last year, with 260 working days and an average workforce of 40 operators, the company produced 42,000 gears. Aggregate demand for the next six months is estimated as follows: Month January February March April May June Demand 2770 3320 3970 3540 3180 2900 The following cost information is available: Holding cost per gear per month = £3 Back-order cost per gear per month = £10 Hiring cost per operator = £1,000 Lay-off cost per operator = £1,500 Hourly wage rate = £15 (operators are paid for 8 hours a day) At the start of January, 35 operators are available and there is no inventory. Knowing the available information, estimate the cost following strategies for aggregate planning: Chase strategy Level strategy (assume 35 workers are to be used throughout, back-ordering allowed).

What about hourly wage rate? Is it not gonna add in it?

Kindly show all calculations for each month

Answer rating: 100% (QA)

Chase Strategy Match production with demand For each month production equals demand January 2770 February 3320 March 3970 April 3540 May 3180 June 290... View the full answer