Planning Values:
Starting inventory:			500
Starting and ending workforce:			10
Hours worked per month per worker:			160
Production cost per unit:			$100.00
Hours per unit:			2.5
Hiring cost per worker:			$1,250
Layoff cost per worker:			$500
Monthly per-unit holding cost:			$20
Plant capacity:			700

Information:
Cash inflow per phone		$1000
Regular production outflow		$500
Overtime production outflow:		$600
Monthly inventory holding cost:		$20

Discussion Currently, we are using a level production plan of 610 units per month. I want you to see if that is the best approach from a cost and service standpoint. I always thought that we have too much inventory when I walked through the warehouse.

Use the planning values provided by production to evaluate whether the level production plan is the best option. If not, recommend a better approach and support your recommendation with analysis.