As Sally$$s business continues to grow, she needs some guidance with her hiring decision and how much space to rent. College grads are harder to change and take about $2$ months to hire. She leases space by the year. She has the option to lease a bigger space in about $6$ months. Therefore, in the short run she can change only unskilled worker. In medium run she can change both skilled and unskilled workers, but not space. In the long run, all workers and space can be changed.

She expects to receive $1500$ orders per month in the current month $($short run$).$ She expects to receive $2000/$month within $4$ months $($medium run$)$ and $2500/$month within a year $($long run$).$ She pays an average daily salary of $$57\mathrm{.}50$ for high school students, $$136$ for college grads and pays $$1\mathrm{.}89/$ month per square foot of warehouse space. High school students are easy to hire and fire.

Although Sally$$s business is growing, her profits are not. Help Sally hit her production targets and minimize costs in the short, medium and long run. Give her advice on hiring skilled and unskilled labor as well as how much space to lease. You may also suggest other creative changes if they are based on the model and you can estimate the effects.

Determine what her optimal input levels should have been in the last two months of the data, keeping monthly output the same. Do these calculations for both medium$-$term $($unskilled and skilled labor only$)$ and long$-$term $($all inputs$)$ adjustments. What are the total and average costs on these levels compared to the total and average costs in the last month? For the total cost, use Cost of Goods Sold plus Total Expenses.