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You are the operations manager for an OEM manufacturing plant that produces YBOX game consoles. Based on the sales record from 2014, the marketing manager forecasts the demand for Jan- June of 2015 as the following: JAN. FEB. MAR. APR. MAY JUNE 2,500 3,000 4,000 3,500 3,500 3,000 Relevant information includes: Production Time 1 hour per unit Average labor cost $10 per hour Workweek 5 days, 8 hours per day Days per month 20 work days per month Beginning inventory 500 units Safety stock One-half month Shortage cost $20 per unit per month Carrying cost $5 per unit per month As the operations manager, you prefer to keep a constant workforce and production level, absorbing variations in demand through inventory excesses and shortages. Demand not met is carried over to the following month. You currently have 21 workers.
a. Which aggregate plan will you use to produce the forecasted demand for YBOX game consoles?
b. What is the total cost for the chosen plan?
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