Suppose you have been given responsibility for developing thesix-month aggregate production plan at Soda Galore, a manufacturerof soft drinks. Your company makes three types of soft drinks:regular, diet, and super-caffeinated. Fortunately, all three typesare made using the same production process, and the costs relatedto switching between the three types are so minimal that they canbe ignored. Thus, you can treat your problem as an aggregateplanning exercise where the planning unit is cases of soft drinks,regardless of what types of drinks they are.

January	16,000
February	24,000
March	32,000
April	32,000
May	60,000
June	88,000
Total Demand	252,000
Average Monthly Demand	42,000

Current Workforce	10 workers
Average Monthly Output per Worker	2000 cases per month
Inventory Holding cost	$0.30 per case per month
Regular wage rate	$36 per hour
Regular production hours/ month/ worker	$100
Overtime wage rate	$54 per worker
Hiring cost	$1000 per worker
Firing cost	$1500 per worker
Subcontracting cost	$2.90 per case
Beginning inventory	7,000 (all safety stock)

A)Total cost is workforce size adjusted

Total cost if overtime production used

Total cost if subtracting used

B)After much internal discussion, the company decides tomaintain a permanent workforce of 10 production workers. Given thesame planning information and this new requirement, develop asix-month production plan based on hybrid production. Determine thecost of the hybrid production plan. Use the overtime cost.