Question: H&C Corporation is preparing an aggregate production plan for Opti-Mist for the next four months. The company's expected monthly demand is given in the following
H&C Corporation is preparing an aggregate production plan for Opti-Mist for the next four months. The company's expected monthly demand is given in the following chart. The company will have 50 units in inventory at the beginning of the first month and wishes to maintain at least 50 units at the end of each month. Following is other critical data:
Production cost per unit = $50
Inventory carrying cost per month per unit = $10 (based on ending month inventory)
Hiring cost per worker = $300
Firing cost per worker = $200
Beginning number of workers = 16
Each worker can produce = 50 units per month.
| Month | Demand | Regular production | Overtime | Ending inventory | Workers required | Hire | Fire |
| 1 | 1200 | ||||||
| 2 | 1200 | ||||||
| 3 | 1500 | ||||||
| 4 | 1300 | ||||||
| Total | 5,200 |
What is the total hiring/firing cost for a level plan?
What is the total inventory carrying cost for the level plan?
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