What should aggregate plan be if the inventory holding cost

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Reference no: EM13897098

The current aggregate demand requirements for a firm are shown below for the next six months:

Month	May	June	July	Aug	Sept	Oct
Demand	120	100	100	100	130	150

The firm always plans to meet all demand. The firm currently has 120 workers capable of producing 120 units in a month (1 unit/worker). The workforce can be increased (at a cost of $500 per worker) or decreased (at a cost of $1,000 per worker). Inventory holding cost is $100 per unit per month. The firm currently has 40 units of inventory on hand, and it would like to have 40 units available at the end of each month. Regular production cost is $3,000 per unit.

- What should the aggregate plan be if the inventory holding cost is to be minimized?

- What is the cost of this plan?

Reference no: EM13897098

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