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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