The president of Hill Enterprises, Terri Hill, projects the firm’s aggregate demand requirements over the next 8 months as follows: January 1,200 May 2,200
February 1,600 June 2,300
March 1,800 July 1,900
April 1,900 August 1,900
Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $125 per unit. Inventory holding cost is $25 per unit per month. Ignore any idle-times costs. The plan is called plan A.
Plan A: Vary the workforce level to execute a "chase" strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $50 per unit. The cost of laying off workers is $80per unit. Evaluate this plan. (Enter all responses as whole numbers)
Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,200 in February incurs a cost of layoff for 400 units in February.
Period Month Demand Production Hire Layoff Ending Stockouts
units units Inventory units

0 Dec. 1,600 1,600 200
1 Jan. 1,200 1,600
2 Feb. 1,600 1,200
3 March 1,800 1,600
4 April 1,900 1,800
5 May 2,200 1,900
6 June 2,300 2,200
7 July 1,900 2,300
8 Aug. 1,900 1,900