# Planners for a company that makes several models of skateboards are about to prepare the…

Planners for a company that makes several models of skateboards are about to prepare the aggregate plan that will cover six periods. They have assembled the following information:

They now want to evaluate a plan that calls for a steady rate of regular-time output, mainly using inventory to absorb the uneven demand but allowing some backlog. Overtime and subcontracting are not used because they want steady output. They intend to start with zero inventory on hand in the first period. Prepare an aggregate plan and determine its cost using the preceding information. Assume a level output rate of 300 units (skateboards) per period with regular time (i.e., 1,800/6=300). Note that the planned ending inventory is zero. There are15 workers and each can produce 20 skateboards per period. After preparing the plan you conclude that the The total cost is \$5,000 Inventory cost is \$600 Regular labor cost is \$3,600 Inventory cost is \$450 Backorder cost is \$600 Regular labor output in each period is 300 units

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