Mama

$$

s Stuff

$$

n

$$

$$is a popular food item during the fall and winter months, but it is marginal in the spring and summer.

Month Demand Forecast

March

$2$

$0$

$0$

$0$

April

$1$

$0$

$0$

$0$

June

$1$

$0$

$0$

$0$

July

$1$

$0$

$0$

$0$

August

$1$

$5$

$0$

$0$

September

$2$

$5$

$0$

$0$

October

$3$

$0$

$0$

$0$

November

$9$

$0$

$0$

$0$

December

$7$

$0$

$0$

$0$

January

$4$

$0$

$0$

$0$

February

$3$

$0$

$0$

$0$

Overtime capacity per month: Regular production

Subcontracting capacity per month: Unlimited

Regular production cost: $

$3$

$0$

$$per pallet

Overtime production cost: $

$4$

$0$

$$per pallet

Subconracting cost: $

$5$

$0$

$$per pallet

Holding cost: $

$2$

$$per pallet

Beginning workforce:

$1$

$0$

$$workers

Production rate:

$2$

$0$

$0$

$$pallets per workers per month

Hiring cost: $

$5$

$0$

$0$

$0$

$$per worker

Firing cost: $

$8$

$0$

$0$

$0$

$$per worker

Use the following demand forecasts and costs to determine which of the following production planning strategies is best for Mama

$$

s Stuff

$$

n

$$

$$:

a

$.$

$$Level production over the

$1$

$2$

$$months

b

$.$

$$Produce to meet demand each month. Absorb variations in demand by changing the size of the workforce.

c

$.$

$$Keep the workforce at its current level. Supplement with overtime and subcontracting as necessary.