Osprey Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters.

Which of the following three production plans is preferable?

1. Plan Achase demand by hiring and layoffs.
2. Plan Bpure level strategy (no change in workforce, constant production rate of total annual demand divided by total number of periods),
3. Plan Cno change in the workforce, the constant production rate of 1350 level with the remainder by subcontracting?

Plan Achase demand by hiring and layoffs

Plan Bpure level strategy (no change in workforce, constant production rate of total annual demand divided by total number of periods)

Plan Cno change in the workforce, the constant production rate of 1350 level with the remainder by subcontracting?

Demand Quarter 1 1400 2 1200 3 1600 1500 4 Previous quarter's output Beginning inventory Stockout cost Inventory holding cost Hiring workers Laying off workers Subcontracting cost Unit cost Overtime 1300 units O units $50 per unit $10 per unit at end of quarter $40 per unit $80 per unit $60 per unit $30 per unit $15 extra per unit Osprey Fabrication Solution Demand Regular Time Production Units Increase Units Decrease Initial Inventory Period 1 Period 2 Period 3 Period 4 Total (units) Cost per unit Subtotal Costs Total Cost Osprey Fabrication Solution Demand Regular Time Production Units Increase Units Decrease Initial Inventory Period 1 Period 2 Period 3 Period 4 Total (units) Cost per unit Subtotal Costs Total Cost