You are given the following data to construct a aggregate plan.

Cost data

Regular time labor cost per unit RM 10

Overtime time labor cost per hour RM 15

Subcontracting cost per unit (labor only) RM 80

Back order cost per unit per period RM 20

Inventory holding cost per unit per period RM 10

Hiring cost per employee RM 500

Firing cost per employee RM 400

Capacity Data

Beginning workforce 40 employees

Beginning inventory 500 units

Beginning back orders 0 units

Regular production available per period (unit) 100 units per period per worker

Quarter Demand

1 4,420

2 2,480

3 2,200

4 3,280

(a) What is the required workforce level and how many worker(s) are hired or fired at the beginning of period 1? What is the total cost involved for the strategy.

(b) Develop a matching demand (chase) aggregate plan. Compute the total cost involved for the strategy.

(c) Which aggregate plan is better off?

(d) If the manufacturer is practicing matching demand for its aggregate plan, calculate the material cost for second period if

(i) 5 units of product require 1 unit of material and the material cost is RM20 per unit.

(ii) 1 unit of product require 2 units of material and the material cost is RM50