Deb Bishop Health and Beauty Products has developed a new shampoo, and you need to develop its aggregate schedule. The cost accounting department has supplied you the costs relevant to the aggregate plan, and the marketing department has provided a four-quarter forecast. All are shown as follows: Quarter Forecast 1 1,200 2 1,200 3 1,500 4 1,300 Previous quarter output = 1,500 units Beginning inventory = 0 units Stock out cost = $50 per unit Inventory holding cost = $10 per unit for every unit held at the end of the quarter Hiring workers = $ 40 per unit Layoff workers= $80 per unit Unit cost = $30 per unit Subcontracting = not available overtime $15 extra per unit Your job is to develop an aggregate plan for the next four quarters.
a) First, try a chase plan by hiring and layoffs (to meet the forecast) as necessary. And what is the the total time cost including normal time labor costs for this firing and hiring plan?
B) Then try a plan that holds employment steady (level strategy) by producing the average foracast for all for quarters the total time cost including normal time labor costs for this firing and hiring plan?
c) Which is the more economical plan for Deb Bishop Health and Beauty Products?