Liz Perry Health and Beauty Products developed a new shampoo and must prepare an additional program. The cost accounting department gave him the relevant cost for the aggregate plan and the marketing department gave him a forecast for four quarters. The above information is shown below.
Her job is to develop an aggregate plan for the next four quarters, considering:

a) First, test a chase plan by hiring and firing workers as necessary (to meet the forecast).
b) Then try a plan that keeps employment constant. What is the cheapest plan for Liz Perry Health and Beauty Products?

Quarter	Forecast
1	1400
2	1200
3	1500
4	1300

Costs
Production from the previous quarter		1500 units
Initial inventory		0 units
Cost for missing or late orders		$50 per unit
cost of holding inventory		$10 per unit remaining at the end of the quarter
				hiring workers		$40 per unit
dismissal of workers		$80 per unit
unit cost		$30 per unit
extra time		Additional $15 per unit
outsourcing		Not available

Answer rating: 100% (QA)

Solution To determine the cheapest plan for Liz Perry Health and Beauty Products we need to consider two options a chase plan where workers are hired and fired as necessary to meet the forecast and a ... View the full answer