2. Kosar Manufacturing has collected the following information on one of its major products. (Use a spreadsheet to model

(a) and

(b) below.)

Most efficient production rate = 2,100 units per period.

Production change costs = $15 per unit of change (from 2,100 units/period).

Inventory costs = $5 per unit per period (on closing inventory balance).

Back order costs = $10 per unit to carry forecast demand into next period.

Beginning inventory = 350 units.

a. Using the preceding demand schedule, calculate a level production schedule that yields zero inventory at the end of period IV.

b. Calculate the total costs associated with the production schedule in part a.

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Period I II Demand Forecast (Units) 3,000 III IV 2,250 2,000 2,700