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Background: Wes and Steve are partners in a lunch truck company that operates a central kitchen and operates lunch trucks that travel to various locations in Philadelphia, Monday-Friday. The lunch trucks deliver pre-packaged healthy sandwich and salad alternatives, fresh fruit and pre-packaged low-fat desserts and canned beverages. Together, the partners must make many decisions about how to structure the operational aspects of the business so that it is cost effective, efficient, and profitable. Current Situation: Wes and Steve have begun to sell their bottled hot sauce to area markets. They have prepared a forecast of expected demand for the bottles for the next 6 periods as shown below. Given this information and the data re: capacities and costs, complete the 2 required aggregate plans on the next pages and answer the Qs shown. Period 1 2 3 5 6 Forecast 300 550 350 350 350 500 Maximum regular production = 350 units/period Maximum overtime = 40 units/period Maximum Subcontracting = 300/period Beginning inventory = 0 Ending inventory (in period 6) = 0 Regular time cost = $10 Overtime cost = $15 Sub-contract cost $25 Inventory holding costs are $2/average unit/period Backorders cost of $30/unit/period Important Notes: You must write neatly and NOT in red ink You are not permitted to cross out answers; use white-out or start over. If I cannot read your work, you will receive zero points. Round to 2 decimal points if necessary. CARRY THROUGH ERRORS COUNT and points will be deducted! Double check your work. LEVEL PLAN (5 pts) Periods Forecast Output Regular Overtime Subcontract Output - Forecast Inventory Beginning Ending Average Backlog Costs: Output: Regular Overtime Subcontract Inventory Back orders Total Continue to Next Page 1 300 2 550 3 350 4 350 5 350 6 500 TOTAL CHASE PLAN (5 pts) Period Forecast Output Regular Overtime Subcontract Output-Forecast Inventory Beginning Ending Average Backlog Costs: Output: Regular Overtime Subcontract Inventory Back orders Total 1. Which plan is better from a cost standpoint? (1 pt.) 2. Which plan is better for employees? Why? (1 pt.) 3. For each plan, how would service/quality be jeopardized (be very brief with your response)? (2 pts) Level: Chase: 4. If demand was to increase over time, what SPECIFIC STRATEGY action must Wes and Steve undertake to ensure profitability, cost effectiveness and quality for their business? (FYI-be specific when stating how; there is only one correct answer to this Q) (1 pt.) 1 300 2 550 3 350 4 350 5 350 6 500 TOTAL