Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Calculate the aggregate production rate:

Transcribed Image Text:The BackPack Company produces a line of backpacks. The manager, Tameka Nicholas, is interested in using a level aggregate plan.
Inventories and back orders will be used to handle demand fluctuations. She has asked you to develop such a plan. Use the following
data to solve the problem:
Problem Data
Cost data
Regular-time labor cost per hour
$12.00
Overtime labor cost per hour
$16.00
Subcontracting cost per unit (labor only)
$80.00
Holding cost per unit per period
$8.00
Back-order cost per unit per period
$15.00
Hiring cost per employee
$500.00
Firing cost per employee
$350.00
Capacity data
Beginning workforce
198 employees
Beginning inventory
500 units
Labor standard per unit
6 hours
Regular time available per period
170 hours
Overtime available per period

Transcribed Image Text:Firing cost per employee
$350.00
Capacity data
Beginning workforce
198 employees
Beginning inventory
500 units
Labor standard per unit
6 hours
Regular time available per period
170 hours
Overtime available per period
30 hours
Subcontracting maximum per period
1,000 units
Subcontracting minimum per period
500units
Demand data
Period 1
5,500 units
Period 2
4,700 units
Period 3
7,700 units
Period 4
5,700 units
Period 5
6,600 units
Period 6 3.900units
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