Question 2. 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 $300 per unit. John is considering a plan that keep the current 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. (4 marks) Month Demand Working days Jan 3000 22 Feb 3600 19 Mar 3400 21 Apr 2600 21 May 2200 22 Jun 3200 20 Total 18000 If John is allowed to use Overtime to produce the excessive demand with overtime labor cost of $7.5/hour for each worker, would you choose overtime or subcontract? Why? (1 mark)