Dairy Crest produce a range of cheeses with raw material sourced close to the Swiss

Alps. Its luxury product exhibits an oscillating demand pattern over the year.

Given the following costs and quarterly sales forecasts, calculate the costs of a level

production or chase demand production strategy. Discuss, which strategy would you

recommend they adopt and why?

Quarter Sales forecast $($lbs$)$

Q$170,000$

Q$2130,000$

Q$370,000$

Q$4130,000$

Hiring Cost $100$ per worker

Firing Cost $500$ per worker

Inventory carrying cost $0\mathrm{.}70$ per pound $($lb$)$ per quarter

Production per employee $1000$ pounds per quarter

Beginning workforce $100$ workers

$[25\%]$