A firm practices a pure chase strategy. Production last quarter was 818. Demand over the next four quarters is estimated to be 975, 935, 886, and 968. Hiring cost is $19 per unit, and layoff cost is $6 per unit. Over the next year, what will be the sum of hiring and firing costs?
1. A firm practices a pure chase strategy. Production last quarter was 818. Demand over the next four quarters is estimated to be 975, 935, 886, and 968. Hiring cost is $19 per unit, and layoff cost is $6 per unit. Over the next year, what will be the sum of hiring and firing costs?
2. A firm practices a pure level strategy that sets the production level at the average demand over the next four periods. Inventory last quarter was 0. The extra units produced are stored in a warehouse. The extra units needed are subcontracted. Demand over the next four quarters is estimated to be 1041, 1019, 1188, and 1090. Production cost is $25 per unit, and Inventory cost is $4 per unit. What is the production level at this form?
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