Prepare an aggregate plan that uses inventory

Prepare an aggregate plan that uses inventory

Given the projected demands for the next six months, prepare an aggregate plan that uses inventory, regular time and overtime, and backorders. The plan must wind up with no units and no backorders in ending inventory in Period 6. Regular time capacity is 150 units per month and must be used every month. Overtime capacity is 20 units per month. Overtime cost is $30 per unit, backorder cost is $20 per unit, inventory holding cost is $5 per unit, regular time cost of $20 per unit, and beginning inventory is zero. Use as little overtime as you can, backorder is preferred to overtime. Backorder costs are incurred on ending inventory not average inventory in the same period in which they occur. Backorders in period 1 have costs applied to period 1.

MOnth 1- Forecase 180

Month 2- Forecast 170

Month 3 Forecast 140

Month 4

Forecast 150

Month 5 Forecast 130

Month 6 Forecat 150