Deb Bishop Health and Beauty Products has developed a new shampoo, and you need to develop | Homework Help

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 1,400

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

· Overtime = $ 15 extra per unit

· Subcontracting = not available

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.

Then try a plan that holds employment steady.

c) Which is the more economical plan for Deb Bishop Health and Beauty Products?