A level strategy based on the following information

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Reference no: EM131095047

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.





Beginning inventory





Demand forecast





Number of working days by month






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

Reference no: EM131095047

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