The JC company needs to develop an aggregate production plan for the six months from January to June. You have been commissioned to create the plan. The following information are provided:

	Demand and Working days
	Jan	Feb	Mar	Apr	May	Jun	Total
Demand forecast	2,000	1,600	1,200	1,000	1,400	1,800	9,000
Number of working days	22	19	21	21	22	20	125
		Costs
Materials		$100.00/unit
Inventory holding cost		$10.00/unit/month
Marginal cost of stockout		$20.00/unit/month
Marginal cost of subcontracting		$100.00/unit ( $200.00 subcontracting cost less $100.00 material savings)
Hiring and training cost		$300.00/worker
Layoff cost		$600.00/worker
Labor hours required		4/unit
Straight-time cost (first eight hours each day)		$10.00/hour
Overtime cost (time and a half)		$20.00/hour
		Inventory
Beginning inventory		400 units
Safety stock		25% of month demand
Opening workforce		35 workers

What is the cost of each of the following production strategies?

1. Produce exactly to meet demand; vary workforce (assuming opening workforce of 35 workers).

2. Constant workforce of 35 workers: vary inventory and allow shortages only.

3. Constant workforce of 35 workers: use overtime.

Notes: Use ROUND(number, 0) to round workers required to nearest integer number