Question

Problem 13-4 The current aggregate demand requirements for a firm are shown below for the next six months MonthMay June July Aug Sept Oct Demand 260 240 240 240 270 290 The firm always plans to meet all demand. The firm currently has 260 workers capable of producing 260 units in a month (1 unit/worker). The workforce can be increased (at a cost of $650 (at a cost of $1,300 per worker). Inventory holding cost is $150 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 e production cost is $3,700 per unit. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month a. What should the aggregate plan be if the inventory holding cost is to be minimized? (Leave no cells blank be certain to enter "" wherever required.) Regular Production Ending Invento Number of Workers Month May June July August September October Total Demand Hire Fire 260 240 240 240 270 290 1,540 260 240 240 240 270 290 1,540

Answer 1

Since the firm wants to meet demand, so hiring and firing will happen every month according to demand.

The costs would be Production cost, Hiring cost, Layoff cost and Inventory cost

The problem in excel looks like as below

Thus the output is as below