New Generation Mountain Bikes, Inc. manufacturer of the Road Warrior bike line, needs help planning production for next year. Demand for the Road Warrior follows a seasonal pattern, as shown in Table 1 below. Given the data in Table 1, evaluate these four strategies for meeting demand: (a) level production with overtime and subcontracting, (b) pure level production strategy, (c) pure chase strategy, and (d) 2,500 units of regular production from March through September and as much regular, overtime, and subcontracting production in the other months as needed to meet annual demand. Determine the cost of each strategy. Which strategy would you recommend? (Use a spread sheet to solve.)

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DEMAND FORECAST MONTH 1,000 January February 500 March 500 April 2,000 May 3,000 June 4,000 July 5,000 August 3,000 September 1,000 October 500 500 November December 3,000