The Mesa Table Company has projected the following demand for their dining room table line:

There are currently 20 workers on the line, each capable of producing 10 tables per week on regular time, and an extra two tables per week using overtime. A table produced using overtime costs an additional $40 per unit in overtime pay.
They also have the option of using a local subcontractor, but to do so costs an additional $50 per table. They can also hire workers at a hiring cost of $2,000 per worker hired, and if a worker is fired or laid off there is a cost of $3,000 per worker. Any table remaining in inventory at the end of a month costs $10 per month based on the quantity at the end of the month (assume 4 weeks per month).

a. Compute the extra cost to meet all demand by using overtime and inventory.
Subcontracting is to be used only if absolutely necessary. Hiring and firing of workers is not allowed.

b. Compare the extra cost in

(a) with the cost of using hiring/firing and subcontracting, with no overtime and minimal inventory.

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Month Demand 1 740 2 720 3456 860 900 810 700