Input Data (Demand) Input Data (Costs etc.)
Month Demand Item Cost
January 1,000 Materials cost/unit 20$
February 1,100 Inventory holding cost/unit/month 3.0
March 1,000 Marginal cost of stockout/unit/month
April 1,200 Hiring and training cost/worker
May 1,500 Layoff cost/worker
June 1,600 Labor hours required/unit 0.1667
July 1,600 Regular time cost/hour 20.0
August 900 Over time cost/hour 30.0
September 1,100 Marginal subcontracting cost/unit 26.0$
October 800
November 1,400 Initial Workforce size 1250
December 1,700 Maximum overtime per worker per month 20
Starting inventory (‘000s) 50
Ending inventory (‘000s) 50
Aggregate Plan Decision Variables (demand, inventory, production in ‘000s) Constraints
HtLtWtOtItStCtPt
Period # Hired # Laid off # Workforce Overtime Inventory Stockout Subcontract Production Demand Inventory Overtime Production OT Production
0 0 0 1,250 0 50 0 0
1 0 0 1,250 0.0 0.0 0 0.0 950 1,000 0 25000 250000 0
20 0 1,250 0.0 0.0 0 0.0 1100 1,100 0 25000 100000 0
3 0 0 1,250 0.0 0.0 0 0.0 1000 1,000 0 25000 200000 0
40 0 1,250 0.0 0.0 0 0.0 1200 1,200 0 25000 0 0
5 0 0 1,250 25000.0 0.0 0 150.0 1350 1,500 0 0 0 150
60 0 1,250 25000.0 0.0 0 250.0 1350 1,600 0 0 0 150
7 0 0 1,250 25000.0 0.0 0 250.0 1350 1,600 0 0 0 150
80 0 1,250 0.0 0.0 0 0.0 900 900 025000 300000 0
9 0 0 1,250 0.0 0.0 0 0.0 1100 1,100 0 25000 100000 0
10 0 0 1,250 0.0 200.0 0 0.0 1000 800 025000 200000 0
11 0 0 1,250 0.0 0.0 0 0.0 1200 1,400 0 25000 0 0
12 0 0 1,250 25000.0 50.0 0 400.0 1350 1,700 0 0 0 150
Costs
Period Hiring Lay off Regular Time Overtime Inventory Stockout Subcontract Material
1 0 0 4,000,000 0 0 0 0 19,000,000
20 0 4,000,000 0 0 0 0 22,000,000
3 0 0 4,000,000 0 0 0 0 20,000,000
40 0 4,000,000 0 0 0 0 24,000,000
5 0 0 4,000,000 750,000 0 0 3,900,000 27,000,000
60 0 4,000,000 750,000 0 0 6,500,000 27,000,000
7 0 0 4,000,000 750,000 0 0 6,500,000 27,000,000
80 0 4,000,000 0 0 0 0 18,000,000
9 0 0 4,000,000 0 0 0 0 22,000,000
10 0 0 4,000,000 0 600,000 0 0 20,000,000
11 0 0 4,000,000 0 0 0 0 24,000,000
12 0 0 4,000,000 750,000 150,000 0 10,400,000 27,000,000
277,000,000
Total Cost =
356,050,000$
0.0
200.0
1800.0
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Month
Production Plan for Year