Suppose you have been given responsibility for developing the six-month aggregate production plan at Soda Galore, a manufacturer of soft drinks. Your company makes three types of soft drinks: regular, diet, and super-caffeinated. Fortunately, all three types are made using the same production process, and the costs related to switching between the three types are so minimal that they can be ignored. Thus, you can treat your problem as an aggregate planning exercise where the planning unit is cases of soft drinks, regardless of what types of drinks they are.

The S&OP team has developed a forecast of demand for the first six months of the year as shown in Table 13-3. The S&OP team has also provided you with the cost data shown in Table 13-4.

The material cost of a case of soda is the same regardless of whether it is produced in regular time or overtime.

TABLE 13-3 Monthly Demand at Soda Galore

Month	Demand Forecast
January	16,000	cases
February	28,000	cases
March	32,000	cases
April	36,000	cases
May	36,000	cases
June	44,000	cases
Total Demand	192,000	cases
Average Monthly Demand	32,000	cases

TABLE 13-4 Soda Galore Planning Data

Current workforce		6	workers
Average monthly output per worker		4,000	cases per month
Inventory holding cost	$	0.50	per case per month
Regular wage rate	$	26.00	per hour
Regular production hours/month/worker		160	hours
Overtime wage rate	$	39.00	per hour
Hiring cost	$	1,000	per worker
Subcontracting cost	$	1.50	per case
Firing/layoff cost	$	1,500	per worker
Beginning inventory		7,000	(all safety stock)

Assume that employees negotiate an increase in the regular production wage rate to $30 per hour and $45 per hour for overtime. Assume Soda Galore always plans to hold at least 7,000 cases of safety stock to meet unanticipated customer demand. Also assume that hiring and layoff/firing, if necessary, occur at the beginning of the month.

a. Using the planning information and the newly negotiated wage rates, develop a six-month production plan based on level production. (Leave no cells blank - be certain to enter "0" wherever required.)

b. Determine the cost of the level production plan.

c. Using the planning information and the newly negotiated wage rates, develop a six-month production plan based on chase production. For the Overtime or Subcontract Plan, use the lowest monthly demand value to compute the size of the fixed workforce. (Leave no cells blank - be certain to enter "0" wherever required.)

e. After much internal discussion, the company decides to maintain a permanent workforce of 6 production workers. Given the same planning information and this new requirement, develop a six-month production plan based on hybrid production. (Leave no cells blank - be certain to enter "0" wherever required.)

f. Determine the cost of the hybrid production plan. Use the overtime cost.

a. Using the planning information and the newly negotiated wage rates, develop a six-month production plan based on le production. (Leave no cells blank - be certain to enter "O" wherever required.) b. Determine the cost of the level production plan. c. Using the planning information and the newly negotiated wage rates, develop a six-month production plan based on ch production. For the Overtime or Subcontract Plan, use the lowest monthly demand value to compute the size of the fixed workforce. (Leave no cells blank - be certain to enter "O" wherever required.) d. Determine the cost of the chase production plan. e. After much internal discussion, the company decides to maintain a permanent workforce of 6 production workers. Given the same planning information and this new requirement, develop a six-month production plan based on hybrid production. (Leav no cells blank - be certain to enter "O" wherever required.) a. Using the planning information and the newly negotiated wage rates, develop a six-month production plan based on le production. (Leave no cells blank - be certain to enter "O" wherever required.) b. Determine the cost of the level production plan. c. Using the planning information and the newly negotiated wage rates, develop a six-month production plan based on ch production. For the Overtime or Subcontract Plan, use the lowest monthly demand value to compute the size of the fixed workforce. (Leave no cells blank - be certain to enter "O" wherever required.) d. Determine the cost of the chase production plan. e. After much internal discussion, the company decides to maintain a permanent workforce of 6 production workers. Given the same planning information and this new requirement, develop a six-month production plan based on hybrid production. (Leav no cells blank - be certain to enter "O" wherever required.)