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Scenario 8 The Labor Contract at the Plant Prohibits Both Overtime and Faces

Question 59

Multiple Choice

Scenario 8.1-Gang Aft Agley
Gang Aft Agley, a manufacturing company, faces the aggregate planning problem shown in the table below. Cost of regular production is $5 per unit, the cost of producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per unit, and the cost of carrying a unit in inventory from one month to the next is $2.
 January  February  March  April  May  Forecast 5007501200650300 Beginning Inventory 100 Regular Time  Overtime  Subcontracting  Ending Inventory \begin{array}{|l|c|c|c|c|c|}\hline & \text { January } & \text { February } & \text { March } & \text { April } & \text { May } \\\hline \text { Forecast } & 500 & 750 & 1200 & 650 & 300 \\\hline \text { Beginning Inventory } & 100 & & & & \\\hline \text { Regular Time } & & & & & \\\hline \text { Overtime } & & & & & \\\hline \text { Subcontracting } & & & & & \\\hline \text { Ending Inventory } & & & & & \\\hline\end{array}
The labor contract at the plant prohibits both overtime and subcontracting output to exceed 300 units in any five month window. The plant capacity is 600 units per month produced using two shifts, regardless of the number of days in a month. By policy, management wants to avoid stockouts.
-Which of these is a constraint that is appropriate for Scenario 8.1?


A)  Output 680\sum \text { Output } \geq 680
B)  Ending Inventory 0\sum \text { Ending Inventory } \leq 0
C)  Subcontracting + Overtime 300\sum \text { Subcontracting } + \sum \text { Overtime } \leq 300
D)  Subcontracting 300\sum \text { Subcontracting } \leq 300

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