Question $32$ pts

Deforrest Marine Motors manufactures engines for the speedboat racing circuit. As part of their annual planning cycle, they forecasted demand for the next four quarters. The number of available days of production and the anticipated demand are given below.

Q$1$

Q$2$

Q$3$

Q$4$

Demand

$2,400$

$2,200$

$1,700$

$1,800$

They also estimated many of the costs required to conduct operations planning. Some of these key figures are listed below.

Employees

$30$

Hire Cost $$1,200/$employee

Production Rate $70$ units$/$employee$/$quarter Fire Cost $$800/$employee

Production Cost $$1,000/$unit Subcontracting Cost $$1,800/$unit

Backorder Cost $$200/$unit$/$quarter Subcontracting Limit $400$ units maximum

Overtime Cost $$1,500/$unit Inventory Cost $$100/$unit$/$quarter

Overtime Limit $<=25\%$ of Reg. Production Initial Inventory $280$ units

Deforrest Marine Motors wishes to maintain the current number of employees for the entire year to follow a level strategy balanced with inventory and backorders as needed. What is the total cost of this plan?

Flag question: Question $4$

Question $42$ pts

If management at Deforrest Marine Motors is interested in a chase strategy using a hire$/$fire option, what is the total cost of this plan? They plan on using a policy where if the need were for $21\mathrm{.}2$ workers, they would hire $22$ workers for that quarter. $($Hint: this will impact regular time production and inventory.$)$

Flag question: Question $5$

Question $52$ pts

If management at Deforrest Marine Motors is interested in a level strategy with their current employees using overtime and subcontracting when demand cannot be balanced with inventory, what is the total cost of this plan?