A furniture company has the following aggregate demand requirements for January to August. The regular capacity and overtime capacity of the company are 180 units and 220 units respectively. Additionally, an additional 100 units per month can be supplied through subcontracting. However, the subcontracting approach may soon be unavailable.
Month Demand
Cost and Other Data
Jan
220
Beginning Inventory -> 100 units
Stockout Cost -> $250/unit
Inventory Holding Cost -> $100/unit
Unit Cost (regular) -> $1,200/unit
Unit Cost (overtime) -> $1,500/unit
Unit Cost (subcontracting) -> $2,000/unit
Hiring Cost -> $200/employee
Firing Cost -> $500/employee
Feb
160
Mar
200
Apr
210
May
200
Jun
190
Using the "Chase" strategy, develop a six-month aggregate plan and compute the total cost considering just backorders and inventory costs.