Assignment 5- Aggregate Planning Question 1 Prepare TWO (2) strategies in aggregate planning and compute their total costs: (a) Use a mixed strategy: Jan - March use level production strategy with Sub-contracting and OT as needed. While April-June use chase demand strategy. (3 marks) Jan Feb May June March 6,000 Apr 2,000 4,000 8,000 8,000 2.000 Current work force Production per worker Inventory holding cost Regular production cost Overtime production cost Sub-contracting cost Hiring cost Firing cost Beginning inventory 10 workers 200 units per unit $0.30 per unit per month $20.00 per unit $30.00 per unit $40.00 per unit $1,200 per worker $2,400 per worker 4000 units Mth Demand Regular Production Overtime S/k Ending Workers Inventory H F Jan 4,000 Feb 8,000 March 6,000 Apr 2,000 May 8,000 June 2,000 Total 30,000 Total Cost: (b) Use a chase demand strategy. (3 marks) Jan 4,000 Feb 8,000 March 6,000 Apr 2,000 May 8,000 June 2.000 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 10 workers 200 units per month $0.30 per case per month $20.00 per hour $30.00 per hour $40.00 per hour $1,200 per worker $2,400 per worker 4000 units Mth Demand Regular Production Overtime Slk Ending Workers HF Inventory Jan 4,000 Feb 8,000 March 6,000 Apr 2,000 May 8,000 June 2,000 Total 30,000 Total Cost: (c) Between the two strategies which strategy is better and why