Question 3: An organization wants to prepare an aggregate plan for its manufacturing facility. The relevant information is shown as follows: (15 Marks) Production time: 1 hour per unit Beginning inventory: 500 units Average labor cost: $10 per hour Safety stock: 50% of monthly demand Workweek: 5 days, Shift length: 8 hours Shortage cost: $20 per unit per month Days per month: 20 work days/month Carrying cost: $5 per unit per month Management prefers to keep a constant workforce and production level, absorbing variations in demand through inventory excesses and shortages. Demand not met is carried over to the following month. Develop an aggregate plan that will meet the demand and other conditions of the problem.

Month Demand January 2,500 February 3,000 March 4,000 April 3,500 May 3,500 June 3,000 July 3,000 August 4,000 September 4,000 October 4,000 November 3,000 December 3,000