The EGAD Bottling Company has decided to introduce a new line of premium bottled water that will include several "designer" flavours. Marketing manager Georgiana Mercer is predicting an upturn in demand based on the new offer and the increased public awareness of the health benefits of drinking more water. She has prepared aggregate forecasts for the next six months, as shown in the following table (quantities are in tank loads): Month May June Jul Aug Sept Oct Total Forecast 50 60 70 90 80 70 420 Production manager Mark Mercer (no relation to Georgiana Mercer) has developed the following information. (Costs are in thousands of dollars) Regular production cost $1 per tank load Regular production capacity 60 tank loads Overtime production cost $1.6 per tank load Subcontracting cost $1.8 per tank load Holding cost $2 per unit per tank load per month Back ordering cost $5 per month per tank load Beginning inventory 0 Among the strategies being considered are the following: 1. Level production supplemented by up to 10 tank loads a month from overtime. 2. A combination of overtime, inventory, and subcontracting. 3. Using overtime for up to 15 tank loads a month, along with inventory to handle variations. Questions 1. The objective is to choose the plan that has the lowest cost. Which plan would you recommend? 2. Presumably, information about the new line has been shared with supply chain partners. Explain what information should be shared with various partners, and why sharing that information is important.