Aggregate Planning

Manager of Plum Engines must develop an aggregate plan given the forecast for engine demand shown in the table below. The department has a regular output capacity of $152$ engines per period, and the overtime capacity is $20$ engines per period. Regular output has a cost of $$20$ per engine. Overtime has a cost of $$35$ per engine. Subcontracting has a cost of $$55$ per engine. Inventory holding and backorder costs are $$5$ and $$25$ per unit per period, respectively. The beginning inventory is zero engines.

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