Problem $11-8($Static$)$

Nowjuice, Inc., produces Shakewell$$ fruit juice. A planner has developed an aggregate forecast for demand $($in cases$)$ for the next six months.

Month May Jun Jul Aug Sep Oct

Forecast $4,0004,8005,6007,2006,4005,000$

Use the following information to develop aggregate plans.

Regular production cost $ $10$ per case

Regular production capacity $5,000$ cases

Overtime production cost $ $16$ per case

Subcontracting cost $ $20$ per case

Holding cost $ $1$ per case per month

Beginning inventory $0$

Click here for the Excel Data File

$1.$ Develop an aggregate plan using each of the following guidelines and compute the total cost for each plan. Note: Backlogs are not allowed.

a$.$ Use level production. Supplement using overtime as needed. $($Negative amounts should be indicated by a minus sign. Leave no cells blank $-$ be certain to enter $"0"$ wherever required.$)$

b$.$ Use a combination of overtime $(500$ cases per period maximum$),$ inventory, and subcontracting $(500$ cases per period maximum$)$ to handle variations in demand. $($Negative amounts should be indicated by a minus sign. Leave no cells blank $-$ be certain to enter $"0"$ wherever required.$)$

c$.$ Use overtime up to $750$ cases per period and inventory to handle variations in demand. $($Negative amounts should be indicated by a minus sign. Leave no cells blank $-$ be certain to enter $"0"$ wherever required.$)$

$2.$ Which plan has the lowest total cost?

multiple choice

First

Second

Third

All plans are equal