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A fabric mill has developed the following forecasts (in hundred bolts of cloth). The mill has a normal capacity of 275 units (a unit = hundred bolts) per month, and employs 275 workers. Regular labour cost is $ 2,000 per unit and overtime labour cost is $3,000 per unit. Up to 50 units per month can be made during overtime. The beginning inventory is zero. Hiring cost is $1,000 per worker and layoff cost is $500 per worker. The inventory holding cost is $1,000 per unit per month and backorder cost is $5,000 per unit per month. a) Develop a level output/workforce plan. b) Starting with your answer to part a, use the trade-off analysis to find the minimum cost aggregate production plan. Month 1 2 3 4 5 6 7 Total Forecast 250 300 250 300 280 275 270 1,925
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