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Develop a level aggregate plan and calculate the total cost

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Reference no: EM133052663

Question - Sask Trailers assembles different types of small camping trailers demanded between January and June of each year. The demand generally peaks in April and May. Next year's aggregate demand forecast beyond the regular capacity is given in the following table:

Month

Jan

Feb

Mar

Apr

May

Jun

Forecasted Demand above regular capacity

495

570

735

1050

1,170

660

The company can hire temporary workers to meet the above requirements. Each temporary worker can produce 15 units per month. Hiring/training cost is approx. $1,000 per temp worker.

Inventory holding cost per camping trailer per month is $50, charged to average inventory level during a month. Before January, there are no camping trailers on hand. 270 extra units are desired in inventory at the end of June. Any shortage during a period is backordered at a cost of $150 per camping trailer per month.

Required -

a. Develop a level aggregate plan and calculate the total cost.

b. Develop a chase aggregate plan and calculate the total cost. [Ending inventory of 270 units in June is also desired with the chase plan.]

c. Can you achieve a lower total cost than the one in the chase plan? How? [Demonstrate through a complete plan.]

Reference no: EM133052663

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