A fabric mill has developed the following forecasts (in hundreds of bolts of cloth). MONTH 1 2 3 4 5 6 7 TOTAL FORECAST

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A fabric mill has developed the following forecasts (in hundredsof bolts of cloth).
MONTH
1
2
3
4
5
6
7
TOTAL
FORECAST
250
300
250
300
280
275
270
1,925
The mill has a normal capacity of 275 units (1 unit = hundredbolts) per month and employs 275 workers. Regular labour cost is$2,000 per unit and overtime labour cost is $3000 per unit. Up to50 units per month can be made during overtime. The beginninginventory is zero. Hiring cost is $1500 per worker. Inventoryholding cost is $1000 per unit per month; and backorder cost is$5000 per unit per month.
a. Develop a level output/workforce plan.
b. After looking at the results of this plan, the manager hasinvestigated an alternate plan, where he uses 5 hours of overtimein month 5, the total cost of which is $3,910,000. Which plan doyou recommend and why?