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You own a production facility for which you have to prepare an aggregate plan for the Product A.
The forecasted demand for Product A for months January to June is as follows: 1000; 1200; 1250, 1450; 1400; and 1300. Cost data are as follows: Regular time cost per unit (until April 30) - $12.00; Regular time cost per unit (after May 1) - $11.00; Overtime cost per unit (during entire period) - $16.00; Cost of procuring from outside per unit - $18.50; Carrying cots per unit per month - $1.00. You will begin the new year with no inventory left over from the previous year.
In addition, backorders are not permitted. You know the capacity (during regular hours) for producing product A will remain constant at 800 until the end of April and then will increase to 100 units per month after May 1.
Overtime capacity is set at 300 units per month until May 1, after that it will increase to 400 units per month.
A local supplier is available as a backup source to meet demand, but can provide only 500 units total during the 6-month period.
Develop a 6-month production plan for your facility using the transportation method.
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