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Please also calculate ( show ) the associated costs with each strategy, such as regular labor, hiring and layoff, or subcontracting costs And then add
Please also calculateshow the associated costs with each strategy, such as regular labor,
hiring and layoff, or subcontracting costs And then add them up to calculate total cost
associated with each strategy.
Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the
production planner, has assembled the following cost data and demand forecast:
John's job is to develop an aggregate plan. The three initial options he wants to evaluate are:
Plan A: a strategy that hires and fires personnel as necessary to meet the forecast.
Plan B: a level strategy that produces cases per quarter and meets the forecast demand
with inventory and subcontracting.
Plan C: Keep a stable workforce by maintaining a constant production rate equal to the
average requirements and allow varying inventory levels.
Which strategy is the lowestcost plan?
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