The Sohn Aerospace Division of Sohnco has a demand forecast for the first three months of next year is
January 600 ships
February 100 ships
March 900 ships
Strangely, they have 100 ships in stock as of December 31.
a) Plot cumulative demand and a level aggregate production plan with no back orders and no ending inventory.
b) What production is needed each month to meet part a’s conditions?
c) Suppose any left-over ships at the end of each month cost $500,000 per month in storage and interest costs. Assume the start-up inventory is not part of the calculation. Should we make any changes to our plan? Explain your answer.