Question : Question
The current aggregate demand requirements for
The current aggregate demand requirements for a firm are shown below for the next six months: The firm always plans to meet all demand. The firm currently has 160 workers capable of producing 160 units in a month (1 unit/worker). The workforce can be increased (at a cost of $700 per worker) or decreased (at a cost of $1, 400 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, 200 per unit. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month. What should the aggregate plan be if the inventory holding cost is to be minimized? (Leave no cells blank - be certain to enter "0" wherever required.) What is the cost of this plan?