# Developing his aggregate plan

The owner of a small mill-working plant that builds cabinets is developing his aggregate plan for the next year.  The relevant cost data and forecast for the next 4 quarters is provided below.  The
company currently has 12 employees and works one 8 hour shift each day with 2 paid 15 minute breaks.  Assume each quarter has 65 working days, and that it currently has no units in stock.  Use this
information and the information from the table to answer the questions below.
Costs Forecast Other Data Holding Cost/Unit/Quarter \$25.00 Qtr 1 1500 Labor Hours/Unit 4.5Hiring Cost \$2,500.00 Qtr 2 1200 Beginning Inventory 0Layoff Cost \$3,500.00 Qtr 3 2100 Subcontract Cost \$135.00 Qtr 4 1650 Avg. Labor Cost/Hour \$18.00 Overtime Labor Cost/Hour \$27.00 Part I 1) If the company used a chase demand startegy and rounded any fractional number of employees to the nearest whole number, how many employees would be used in each quarter?
2) If the company used a level capacity strategy and rounded any fractional number of employees to the nearest whole number, how many employees would be used?
Period 1 2 3 4 Forecast 1500 1200 2100 1650 Hours Req. Workers Req. Workers Used Part II Assume the company wants to use a Level Capacity Strategy with 14 employees (Round the Production in each period to the nearest whole number). In any period where on-hand inventory and production
do not meet demand the company would supplement with overtime production.  Use the table below to calculate the total costs associated with using this plan.
Q3)  What would the overtime production cost be for this plan? Q4)  What would theTotal Cost be for this plan? Level Capacity Aggregate Plan Period 1 2 3 4 Forecast 1500 1200 2100 1650 Workers Used 14 14 14 14 Hire/(Fire) Production Production – Forecast Beginning Inventory Ending Inventory Average Inventory Overtime Production Total Cost Hiring Cost Firing Cost Reg. Output O.T. Subcontract Inventory Backorder Total Cost: Total Cost For Plan