Consider the following aggregate production planning problem:
Dema Demand 100 units 120 units
Produ Production plan 110 units 110 units
Numb Number of working days per month 20 20
Current work force 10 workers
Numb Number of working hours per day 8
Numb Number of hours required per unit 16
Overti overtime rate $20.00 per hour
Invent Inventory carrying cost $10.00/unit/month
No hiring or layoff is allowed. Also no changes are to be made in the production plan given above.
Total overtime wages for January and February will be:
Total number of hours required for production
(110 units)(16 hrs per unit) + (110 units)(16 hrs per unit) ...
The total overtime wages are exemplified in this tutorial.