Assignment:
The forecasted demand is 1800, 1600, 1400, 1200, for quarters 1,2,3,4, respectively. The beginning and ending annual inventory is 600, no negative inventory is allowed. Unit carrying cost is $2/item/quarter, hiring cost is $92/worker, firing cost is $84/worker, and the labor standard is 6.5 hours/unit.
Q1. What is the minimum total annual cost of the optimal production plan where the total annual cost consists of carrying, hiring, and firing?
A. Cost is $6120
B. Cost is $2800
C. Cost is $2440
D. Cost is $2000
E. Cost is $440
Q2. What is the amount of increased total cost for the level capacity (LC) production plan compared to the minimum optimal production plan where the total annual cost consists of carrying, hiring, and firing?
A. Increase is $360
B. Increase is $3680
C. Increase is $2800
D. Increase is $0
E. Increase is $6120
Q3. What is the amount of increased total cost for the chase demand (CD) production plan compared to the minimum optimal production plan where the total annual cost consists of carrying, hiring, and firing?
A. Increase is $0
B. Increase is $3680
C. Increase is $2800
D. Increase is $6120
E. Increase is $360
Provide complete and step by step solution for the question and show calculations and use formulas.