Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 11,000; winter, 8,000; spring, 6,000; summer, 13,000. Inventory at the beginning of fall is 500 units. At the beginning of fall you currently have 30 workers, but you plan to hire temporary workers at the beginning of summer and lay them off at the end of summer. In addition, you have negotiated with the union an option to use the regular workforce on overtime during winter or spring if overtime is necessary to prevent stockouts at the end of those quarters. Overtime is not available during the fall. Relevant costs are hiring, $100 for each temp; layoff $200 for each worker laid off; inventory holding, $5 per unit-quarter; backorder, $10 per unit; straight time, $5 per hour; overtime, $8 per hour. Assume that the productivity is 0.5 unit per worker hour, with eight hours per day and 60 days per season.

Aggregate Production Planning Requirements
Time Period	Fall	Winter	Spring	Summer
Forecast	11,000	8,000	6,000	13,000
Beginning Inventory	500
Production Required (Forecast - Beginning inventory)
Production hours required (# units * Production Time per unit)
Production hours available (# workers * # hours per day * # days per season)
Overtime hours
Temp workers (Production hrs required - Production hours available)/(Overtime cost * # days per season) rounded up
Temp worker hours available
Total hours available
Actual Production (Production hrs available / Labor hrs required per unit)
Ending Inventory (Beginning inventory + Actual production - Demand forecast)
Workers hired
Workers laid off
Straight Time (Production hrs available x Straight time labor cost)
Overtime
Inventory cost
Backorder cost
Hiring cost
Layoff cost
Total costs