The planner at a company that makes garden tractors is about to prepare an aggregate production plan that will cover the next 6 months. She has collected the following information:

Month	Demand Forecast Above the available capacity through permanent workforce
1	1,000
2	1,000
3	2,000
4	3,000
5	4,000
6	1,000
Total:	12,000

Production per month = 20 units per worker

Initial inventory = 500 units

Desired ending inventory (at the end of month 6) = 0 units

Cost:

              Hire cost = $500 per temporary worker

              Inventory = $10 per tractor per month

              Backorder = $150 per tractor per month

The optimum aggregate plan is:

Month	1	2	3	4	5	6	Total
Forecast Demand above regular capacity	1,000	1,000	2,000	3,000	4,000	1,000	12,000
# of temporary workers required	50	50	100	150	200	50
Temp. Workers hired	25	25	50	75	0	0
Temp. workers laid off	0	0	0	0	0	125
Temp. Total workers	25	50	100	175	175	50
Output	500	1,000	2,000	3,500	3,500	1,000	11,500
							0

1. What is the ending inventory in Month 1?

2. What is the total cost in Month 1?

3. What is the total cost in Month 2?

4. What is the total cost in Month 2?

Answer rating: 100% (QA)

Hire Cost 500 per temporary worker Backorder Cost 150 per tr... View the full answer