Question

Refrigeration Corp. needs an aggregate plan for January through June for its refrigerator production. The company has developed the following​ data:

a) Plan​ A: Vary the workforce so that production meets the forecasted demand​ (maintain inventory at 250​ units). Bell had eight employees on staff in December.​ Part-time labor is available. Complete the following table ​(enter your responses as whole​ numbers).

Costs
Holding cost	​$8/ refrigerator/ month
Subcontracting	​$80/ refrigerator
​Regular-time labor	​$12/ hour
Overtime labor	​$18/ hour for hours above
	8​ hours/ worker/ day
Hiring cost	​$40/ refrigerator
Layoff cost	​$80/ refrigerator
Stockout cost	none

Other Data
Current workforce​ (December)	8 people
Labor​ hours/ refrigerator	4 hours
​Workdays/ month	20 days
Beginning inventory	250 refrigerators
Units demanded in December	320 refrigerators

                                                                                  

Month	Demand Forecast
January	400
February	500
March	550
April	700
May	800
June	700

b) Plan​ B: Use a constant workforce of​ ten, letting inventory fluctuate. Complete the following table ​(enter your responses as whole​ numbers).

	Regular Time
Period	Demand	Production	Ending Inventory	Shortage	Increase​ (Units)		Decrease​ (Units)
Jan	400	400	nothing	nothing	80		0
Feb	500	400	nothing	nothing	0		0
Mar	550	400	nothing	nothing	0		0
Apr	700	400	nothing	nothing	0		0
May	800	400	nothing	nothing	0		0
June	700	400	nothing	nothing	0		0

Plan​ B's

​(enter your response as a whole​ number).

Answer 1

Plan A

	Regular time
Period	Demand	Production	Ending Inventory	Increase (units)	Decrease (units)
Dec		320	250
Jan	400	400	250	80	0
Feb	500	500	250	100	0
Mar	550	550	250	50	0
Apr	700	700	250	150	0
May	800	800	250	100	0
Jun	700	700	250	0	100
Totals		3650	1500	480	100
Marginal costs		$48	$8	$40	$80
Costs		$175,200	$12,000	$19,200	$8,000
					$214,400

Plan B

	Regular time
Period	Demand	Production	Ending Inventory	Shortages	Increase (units)	Decrease (units)
Dec		320	250
Jan	400	400	250	0	80	0
Feb	500	400	150	0	0	0
Mar	550	400	0	0	0	0
Apr	700	400	0	300	0	0
May	800	400	0	400	0	0
Jun	700	400	0	300	0	0
Totals		2400	400	1000	80	0
Marginal costs		$48	$8	$0	$40	$80
Costs		$115,200	$3,200	$0	$3,200	$0
						$121,600