Cost Data

Regular time labor cost per hour

$$10\mathrm{.}00$

Level Aggregate Plan, Using Inventories and Backorders

Overtime labor cost per hour

$$15\mathrm{.}00$

Subcontracting cost per unit $($labor only$)$

$$84\mathrm{.}00$ Compute Level Production Rate

Holding cost per unit period

$$10\mathrm{.}00$ Total Demand $33600$

Back$-$order cost per unit period

$$20\mathrm{.}00$ Less: Beginning Inventory $400$

Hiring cost per employee

$$600\mathrm{.}00$ Total Net Demand $33200$

Firing cost per employee

$$450\mathrm{.}00$ Average Demand Per Period $5600$

Production Rate for Level Plan

Capacity Data Compute Workforce Needed

Beginning workforce $($employees$)$

$280$ Units per Employee per Period $20$

Beginning inventory $($units$)$

$400$ Workers needed $280$

Labor standard per unit $($hours$)$

$8$ Number to Hire $0$

Regular time available per period $($hours$)$

$160$ Number to Fire $0$

Overtime available per period $($hours$)$

$32$

Subcontracting maximum per period $($units$)$

$1000$ Detailed Plan Computations

Subcontracting minimum per period $($units$)$

$500$ Period $1$ Period $2$ Period $3$ Period $4$ Period $5$ Period $6$ Totals Demand Data $($units$)$ Demand $($units$)($net of beg. Inventory$)$

Use the beginning inventory to help meet demand.

$46004300784057006560460033600$

Period $1$

$5000$ Period production $($units$)56005600560056005600560033600$

Period $2$

$4300$ Ending Inventory $($units$)14002700460360-6004004720$

Period $3$

$7840$ Backorders $($units$)00006000600$

Period $4$

$5700$

Period $5$

$6560$ Cost Calculations for Plan A

Period $6$

$4600$ Regular time labor cost $$2,688,000$ Total Number of Periods $6$ Inventory holding cost $$47,200$ Back order cost $$12,000$ Hiring cost $$0$ Firing cost $$0$ Total Cost $$2,747,200$