Develop a Chase Strategy and a Level Strategy based on the following information. The Level Strategy requires the use of a constant workforce equal to the minimum expected demand: subcontracting has to be used for additional capacity.
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jun
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Jul
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aug
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sep
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|
Beginning inventory
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400
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250
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200
|
150
|
|
Demand forecast
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1700
|
1200
|
800
|
800
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Number of working days by month
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22
|
22
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20
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21
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Costs
Materials $350.00 $ per unit
Inventory holding cost $3.50 $ per unit per month
Marginal cost of stockout $25.00$ per unit per month
Marginal cost of subcontracting $50.00
Hiring and training cost $2500.00 $ per worker
Layoff cost $4500.00 $ per worker
Labor hours required per unit 3.0 per unit
Straight-line cost (first eight hours each day) $15.00 $ per hour
Overtime cost $25.00 $ per hour