Question: Polywood is developing an aggregate plan for a popular line of outdoor rocking chairs. The company has collected the following key inputs for its aggregate
Polywood is developing an aggregate plan for a popular line of outdoor rocking chairs. The company has collected the following key inputs for its aggregate planning process in Table
Table
Parameter Value
Previous Month's Production Month in units
Starting inventory in units
Production Cost per unit $
Hiring Cost per unit $
Layoff Cost per unit $
Cost of holding inventory per unit per month $
Cost of a backorder per unit per month $
The company forecasts the demand for the months of the planning horizon and provides the forecasts in Table
Table
Month Demand
Compare a chase strategy using hires and layoffs to a level strategy with inventory and backorders.
Calculate the total cost over the planning horizon for the chase strategy using hires and layoffs.
Calculate the total cost over the planning horizon for a level strategy that uses inventory and backorders and sets production equal to the average demand.
Round up the nearest whole unit when deriving the production value to use in each period.
Which plan has the lowest total horizon cost?
Enter the absolute difference between the total horizon costs of the two plans.
Carry all calculations to decimal places.
Enter your final answer rounded to the nearest dollar.
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