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The following is the forecasted demand for Olives Company over the next few months. Olives Company is considering using a pure chase strategy. The company
The following is the forecasted demand for Olives Company over the next few months. Olives Company is considering using a pure chase strategy. The company has an inventory balance of 300 units and a work force capable of making 9000 units at the beginning of January. Stockout cost due to loss sale is estimated to be $800 per unit. Monthly inventory holding cost are $20 per unit. Olives estimates that adding capacity will cost $75 per unit and firing capacity will cost $50 per unit. Under this plan which of the following is true. Under this plan which of the following is true. Olives will have inventory cost at the end of January of $5500 Olives will spend $500 on hiring at the beginning of January Olives will spend $13,750 on firing at the beginning of January Olives will need to use overtime in April, May and June Olives holding cost will be be a total of $11000 for the entire plan None of the other answers are correct
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