Question: For the following monthly demand forecast develop an aggregate plan when 1},38 units per day is produced and unmet demand is backordered. 2}. 38 units

For the following monthly demand forecast develop an aggregate plan when

1},38 units per day is produced and unmet demand is backordered.

2}. 38 units per day is produced and overtime is when needed.

Month

Demand

Production Days

1

1100

20

2

1500

22

3

1200

21

4

800

21

5

700

18

6

900

22

item

cost

Inventory carrying cost

$ 5 per unit per month

Subcontracting cost per unit

$20 per unit

Average pay rate

$10 /hr ($80 per day)

Overtime pay rate

$17/hr (above 8 hrs/day)

Labour-hours to produce a unit

1.6 hours per unit

Cost of increasing daily production rate (hiring and training)

$300 per unit

Cost of decreasing daily production rate (layoffs)

$600 per unit

Backorder

$10 per unit

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