Ethan Ellen produces high quality dinning table sets in itsMiami plant. The production manager is interested to put togetheran aggregate plan for the next planning period. To create theaggregate plan he has collected various costs onresourcesavailable, and predicted demand for their dinning setsand capacity available for production; which are then compiled inthe following two tables.
Regular-time cost per set
$70
Overtime cost per set
$110
Subcontract cost per set
$120
Carrying cost per set per month
$2
Period
Month 1
Month 2
Month 3
Month 4
Demand (sets)
2,000
2,500
1,300
2,300
Capacity (sets)
Regular time
1,600
1,600
650
1,700
Overtime
400
400
100
500
Subcontract
700
600
600
600
Ethan Ellen starts the planning period with a beginninginventory of 400 sets. Back ordering is not permitted for thisplan.
a.) Minimizing total cost to meet the
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