Aggregate Planning Example Production Cost $100/unit Subcontracting Cost $200/unit Inventory Cost $20/unit/month Initial Inventory 100 units safety stock OT Cost $150/unit (limited to 200 units/month) Level Plan at average Month Sub J Demand Produce Begin Iny End Inv Ave Inv OT 700 600 F M 400 A 650 M 850 1000 J Plan Costa Chase Plan with regular time limit of 600 units Month Demand Produce Begin Inv End Iny Ave Iny OT 700 Sub J F 600 400 M 650 M 850 J 1000 Plan Costa Togo makes riding lawn mowers and tractors. The company's expected quarterly demand is given below. The company will have a beginning inventory of 300 mowers as safety stock. Below is other planning data: Production cost per unit=$200 Hiring cost=$500/worker Inventory carrying cost=$60 per unit per quarter Firing cost=$750/worker Backorder cost=$100 per unit per quarter Each worker can produce 100 units per quarter Current number of workers = 40 BO Level Plan at Average QuarterDemand ProduceBegin InvEnd InvAve Inv Workers Hire Fire 1 9000 2 5000 3 7000 4 9000 Total 30,000 Plan Cost = BO Chase Plan Quarter Demand Produce Begin InvEnd InvEnd Inv Workers Hire Fire 1 9000 2 5000 3 7000 4 9000 Total 30,000 Plan Cost =