Current aggregate demand requirements

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Reference no: EM131800009

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

Month	May	June	July	Aug	Sept	Oct
Demand	250	230	230	230	260	280

The firm always plans to meet all demand. The firm currently has 250 workers capable of producing 250 units in a month (1 unit/worker). The workforce can be increased (at a cost of $600 per worker) or decreased (at a cost of $1,200 per worker). Inventory holding cost is $150 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 $3,650 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.)

b. What is the cost of this plan?

Reference no: EM131800009

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