Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must...

Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the forecast for engine demand shown in the table. The department has a regular output capacity of 130 engines per month. Regular output has a cost of $60 per engine. The beginning inventory is zero engines. Overtime has a cost of $90 per engine.

MONTH
1	2	3	4	5	6	7	8	Total
120	135	140	120	125	125	140	135	1,040

a.	Develop a chase plan that matches the forecast and compute the total cost of your plan. Regular production can be less than regular capacity.
b.	Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carrying cost is $2 per engine per month. Backlog cost is $90 per engine per month. There should not be a backlog in the last month.

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Expert Solution

Colby Messinger answered 2 years ago

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