Question 3 Mr X, a production planner in a fruit drink company has obtained the forecast demand for the next six months as shown in Table 3. He needs to prepare an aggregate schedule to meet the demand. The cost accounting department has supplied the costs relevant to the aggregate plan. Table 3: Forecast demand Month Demand January February March April May June 1400 1500 1600 2000 1500 1200 Costs and other data are as follows: Regular production cost RM35/unit Stockout cost for backorders RM100/unit Inventory carrying costs RM10/unit/month on average inventory Hiring workers RM1500/worker Layoff workers RM3000/worker Subcontracting costs RM60/unit Beginning workforce level 26 Capacity per worker 50 units/month Initial inventory level 400 units Closing inventory level 200 units Mr X decides to select level production strategy, which produce the average amount needed per month to meet the plan. 0) How many extra workforces are required to meet the strategy? (4 % marks) () What is the cost of backordering? (11 % marks) (H) What is the total cost of the plan? (4 marks) [20 MARKS] 8 Period 2 3 5 6 TOTAL Forecast OUTPUT Regular Overtime Subcontract Output-Forecast INVENTORY Beginning Ending Average Backlog COSTS Regular Overtime Subcontract Hire Layoll Inventory Backorders TOTAL