The forecast for a group of items manufactured in a firm is shown below.

Quarter 1 2 3 4 5 6 7 8 Demand 370 320 570 670 550 370 350 480 The firm estimates that it costs Z 200 per unit to increase the production rate, Z 250 per unit to decrease the production rate, Z 75 per unit per quarter to carry the items on inventory and Z 125 per unit if subcontracted. Compare the cost incurred if the following pure strategies are followed.

— Varying the workforce size

— Changing the inventory levels

— Subcontracting.

AppendixLO1