Quarter Forecast            

                    1          190               

                    2          560               

                    3          540               

                    4          440

Hiring Cost                       $100 per worker   

Firing Cost                       $175 per worker   

Regular Production Cost            $ 10 per unit     

Overtime Production Cost         $ 15 per unit     

Inventory Carrying Cost             $ 3 per unit     

Production Per Employee          20 units/qtr    

Beginning Work Force               20 workers

ABC Company is in the process of developing a production plan for the next four quarters. The company is considering two plans that are detailed below. There are currently 30 units in inventory. Using the data in Table 9.7,

a) Prepare a production plan using level production, inventory, and overtime when necessary. Calculate the total cost of the production plan.

b) Prepare a production plan using chase demand strategy and calculate the total cost.

Note: beginning inventory of 30 units