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Business, 07.04.2020 01:33 lanay645

Deb Bishop Health and Beauty Products has developed a new shampoo, and you need to develop its aggregate schedule. The cost accounting department has supplied you the costs relevant to the aggregate plan, and the marketing department has provided a four-quarter forecast.
All are shown as follows:

Quarter Forecast
1 1,400
2 1,200
3 1,500
4 1,300

Costs:
Previous Quarters Output 1,500 units
Beginning Inventory 100 units
Stock-out $50 per unit
Inventory Holding Costs $10 per unit
Hiring Workers $40 per unit
Layoff Workers $80 per unit
Unit Cost $30 per unit
Overtime Cost $15 extra per unit
Subcontracting $60 per unit

Your job is to develop an aggregate plan for the next four quarters.
Plan A: First, try hiring and layoffs based on the prior quarter (to meet the forecast) as necessary. What is the cost of this plan?
Plan B: Then try a plan that holds employment steady. What is the cost of this plan?
Plan C: Then utilize a mixed strategy, first producing at a level production rate of 900 per quarter, then utilizing overtime with a cap of 200 units, then subcontracting. What is the cost of this plan?
Which is the more economical plan for Deb Bishop Health and Beauty Products?

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