Deb Bishop Health and Beauty Products has developed a new shampoo, and you need to develop itsaggregate schedule. The cost accounting department has supplied you the costs relevant to the aggregateplan, and the marketing department has provided a four-quarter forecast. All are shown as follows:
1 1,4002 1,2003 1,500
COSTSPrevious quarter’s output 1,500 units
Beginning inventory 0 unitsStockout cost for backorders $50 per unitInventory holding cost $10 per unit for every unit held at the end of the quarterHiring workers $40 per unit
Layoff workers $80 per unitUnit cost
$30 per unit
Your job is to develop an aggregate plan for the next four quarters.
a. First, try hiring and layoffs (to meet the forecast) as necessary.b. Then try a plan that holds employment steady.c. Which is the more economical plan for Deb Bishop Health and Beauty Products?
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