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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