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Rich Rowe, owner of a dry-cleaning equipment manufacturer, develops an 8-month aggregate plan. Demand and capacity (in units) are forecast as follows:

Capacity Source	January	February	March	April	May	June	July	August
Labor
Regular time	235	255	290	300	300	290	300	290
Overtime	20	24	26	24	30	28	30	30
Subcontract	12	16	15	17	17	19	19	20
Demand	255	294	321	301	330	320	345	340

The cost of producing each dry-cleaning unit is $1,000 on regular time, $1,300 on overtime, and $1,500 on a subcontract. Inventory carrying cost is $100 per unit per month. There is no beginning or ending inventory in stock and no back orders are permitted from period to period.

1. Set up a production plan that minimizes cost by producing exactly what the demand is each month and letting the work force vary. What is this plan's cost?
   
   
   
   

2. Through better planning, regular-time production can be set at exactly the same value, 275, per month. Does this alter the solution?
   
   
   
   

3. If overtime costs rise from $1,300 to $1,400, will your answer to part (a) change? What if they fall to $1,200?
   
   
   
   

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