Demand Forecast

Month Demand Forecast

January 1600
February 3000
March 3200
April 3800
May 2200
June 2200

Cost

Item Cost
material cost $ 10
inventory holding cost $ 2
marginal cost stockout/blacklog $ 5
hiring and training costs $ 300
layoff cost $ 500
labor hours required $ 4
regular time cost $ 4
overtime cost $ 6
cost of subcontracting $ 30
Aggregate Plan Decision Variables

Period Hired (Ht) Laid off (Lt) Workforce (Wt) Overtime (Ot) Inventory (It) Stockout (St)
0 0 0 80 0 1000 0
1 185 0 265 0 10000 0
2 0 0 265 0 7000 0
3 0 0 265 0 3800 0
4 0 0 265 0 0 0
5 0 0 265 0 0 0
6 0 0 265 0 500 0

Aggregate Plan Costs

Period Hiring Lay off Regular time Overtime Inventory Stockout

1 55500 0 1060 0 20000 0
2 0 0 1060 0 14000 0
3 0 0 1060 0 7600 0
4 0 0 1060 0 0 0
5 0 0 1060 0 0 0
6 0 0 1060 0 1000 0

Total Cost = 259460

Total Revenue 496000

 Constraints

Subcontract (Ct) Production (Pt) Demand Workforce Production Inventory

0
0 10600 1600 0 0 0
0 0 3000 0 10600 0
0 0 3200 0 10600 0
0 0 3800 0 10600 0
0 2200 2200 0 8400 0
0 2700 2200 0 7900 0

Subcontract Material
0 106000
0 0
0 0
0 0
0 22000
0 27000
Overtime

2650
2650
2650
2650
2650
2650