Question: Calculate the total cost for each aggregate plan based on the following unit costs: Regular output = $40 Overtime = $50 Subcontract = $60 Average

Calculate the total cost for each aggregate plan based on the following unit costs: Regular output = $40 Overtime = $50 Subcontract = $60 Average Balance Inventory = $10 a. First aggregate plan

Period

Jan

Feb

Mar

Apr

May

Jun

Forecast

300

320

320

340

320

320

Output

Regular

300

300

300

300

300

300

Overtime

20

20

20

20

20

20

Subcontract

0

0

0

0

0

0

b. Second aggregate plan using subcontract

Period

Jul

Aug

Sep

Oct

Nov

Dec

Forecast

320

340

360

380

400

400

Output

Regular

300

300

300

300

300

300

Overtime

20

20

20

20

30

30

Subcontract

20

30

40

40

60

70

c. Based on the second aggregate plan, the operations manager is considering adding temporary additions from July to December. This will increase regular output to 350 units per month. Then it was decided not to use overtime and to use subcontracts if there was a shortage. Determine the total cost of the aggregate plan.

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