Aggregate Planning

SECTION C - EXERCISE EXERCISE #1 A. Prepare TWO (2) strategies in aggregate planning and compute to total cost: 1). Use level production strategy with 20 workers. Supplement using overtime than and sub-contracting with not more inventory as needed. 8 workers and May Jan 24,000 June 52,000 Feb 32,000 March 56,000 April 72,000 64,000 Current work force Production per worker Inventory holding cost Regular wage rate Overtime wage rate Sub-contracting wage rate Hiring cost Firing cost Beginning inventory 15 workers 2000 units per month $0.30 per case per month 20.00 per unit $30.00 per unit $40.00 per unit $1,200 per worker $3,600 per worker 4000 units Mth Demand Regular Production S/ Ending Inventory W H Jan 24,000 Feb 32,000 Mac 56,000 Apr 72,000 May 64,000 June 52,000 Total 300,000 Total Cost