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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.
Number of working days by month
Materials $350.00 $ per unitInventory holding cost $3.50 $ per unit per monthMarginal 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
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