ABC Wash, Inc., makes commercial and industrial laundry machines (the kinds hotels use), and has these aggregate demand requirements for the next six months. The firm has regular capacity for 200 units, and overtime capacity of 20 units. Currently, subcontracting can supply up to 40 units per month, but the subcontracting firm may soon be unavailable.

Demand for Month M1 is 220, M2 is 195, M3 is 210, M4 is 212, M5 is 230, and M6 is 205. Previous output level is 150 units and the beginning inventory is 100 units.

Back-Ordering cost	$250 per unit per month
Inventory holding cost	$100 per unit at end of month
Regular time cost	$1,200 per unit
Subcontracting cost	$2,000 per unit
Overtime cost	$1,500 per unit
Cost of increasing units (hiring)	$200 per unit
Cost of decreasing units (layoffs)	$350 per unit

a. Produce utilizing a level strategy at 180 units in which the company incurs regular time production costs, inventory charges and any costs due to the change in the production level from the previous output level. What is the cost of this strategy? [ Select ] ["$750,250", "$1,362,750", "$1,358,000", "$1,426,000", "$1,335,000"]

b. Was there a need to back-order? If so, how many units? [ Select ] ["241 units", "Zero - there was no need to back-order", "176 units", "250 units", "155 units"]

c. Produce utilizing a mixed strategy by producing 160 units every month. Then, utilize overtime, and subcontracting to meet demand. (Don't forget the capacity limitations on overtime and subcontracting.) What is the cost of this strategy? [ Select ] ["$1,257,358", "$1,545,000", "$1,561,500", "$1,499,000", "$1,512,000"]

d. Based on the mixed strategy, what was the cost of utilizing overtime [ Select ] ["$134,000", "$277,500", "$120,000", "$180,000", "$1,500"]

e. Based on a strategy of varying the workforce (Chase), what is the total cost? [ Select ] ["$1,624,900", "$1,234,500", "$1,422,900", "$1,499,000", "$1,567,000"]

f. Which strategy provides the lowest cost solution?