John, the operations manager, is developing an aggregate plan of the home-networking products for the coming six months. He has obtained a demand forecasts for the planning horizon as shown below. The department now has 60 full-time workers, each of whom can produce 2 units per day. They work for eight hours per day and the labour cost is $5 per hour. The material cost is $100 per unit and the inventory cost is $1.5 per unit per month. The subcontract cost is $130 per unit (including the material cost) and stockout cost is $310 per unit. John is considering a plan that would firing SIX workers before start working in January and then keep the same workforce level, for any excessive demand, he will subcontract. The hiring and firing cost for each worker is $150 and $200 respectively. Determine the total cost of this plan.

Month	Jan	Feb	Mar	Apr	May	Jun	Total
Demand	2500	3600	3400	2600	2700	3200	18000
Working days	22	19	21	21	22	20

If John is allowed to use Overtime to produce the excessive demand with overtime labor cost of $7.0/hour for each worker, should he choose overtime or subcontract? Why?