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

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Advance Math

Manager T. C. Downs of Plum Engines, a producer of lawn mowersand leaf blowers, must develop an aggregate plan given the forecastfor engine demand shown in the table. The department has a regularoutput capacity of 130 engines per month. Regular output has a costof $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 andcompute the total cost of your plan. Regular production can be lessthan regular capacity.

b.

Compare the costs to a level plan that uses inventory toabsorb fluctuations. Inventory carrying cost is $2 per engine permonth. Backlog cost is $90 per engine per month. There should notbe a backlog in the last month.

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