Question: The current aggregate demand requirements for a firm are shown below for the next six months: Month May June July Aug Sept Oct Demand 350

The current aggregate demand requirements for a firm are shown below for the next six months:

Month May June July Aug Sept Oct
Demand 350 330 330 330 360 380

The firm always plans to meet all demand. The firm currently has 350 workers capable of producing 350 units in a month (1 unit/worker). The workforce can be increased (at a cost of $550 per worker) or decreased (at a cost of $1,100 per worker). Inventory holding cost is $200 per unit per month. The firm currently has 30 units of inventory on hand, and it would like to have 30 units available at the end of each month. Regular production cost is $4,150 per unit. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month.

a. What should the aggregate plan be if the inventory holding cost is to be minimized? (Leave no cells blank - be certain to enter "0" wherever required.)

The current aggregate demand requirements for a

b. What is the cost of this plan?

Month Demand Regular Production Ending Inventory Number of Workers Hire Fire May 350 350 June 330 330 330 330 330 330 July August September October 360 360 380 380 Total 2,080 2,080

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