Aggregate Units of Production (2)Holding costs:Occurs as a result of having capital tied up in inventory. Always assumed to be linear in the number of units being held at a particular point in time; For aggregate planning,it is expressed in terms of dollars per unit held per planning period;(e.g.100 $/month for one item) Charged against the inventory remaining on hand at the end of the planning period; •At the beginning:50 蓝 Slope=C .Week 1:In 100 A .Week 2:Out 130 Slope=Cp .Week 3 In 30 .Week 4 Out 30 Negative--Back-orders Positive--Inventory Fig.3-3 Holding and Back-Order Costs .Charge only 20Aggregate Units of Production (2) Holding costs: Occurs as a result of having capital tied up in inventory. • Always assumed to be linear in the number of units being held at a particular point in time; • For aggregate planning, it is expressed in terms of dollars per unit held per planning period; (e.g. 100 $/month for one item) • Charged against the inventory remaining on hand at the end of the planning period; Negative--Back-orders Slope = CP Slope = Ci $ Cost Positive--Inventory  Fig.3-3 Holding and Back-Order Costs •At the beginning: 50 •Week 1: In 100 •Week 2: Out 130 •Week 3 In 30 •Week 4 Out 30 •Charge only 20