Question: A bowling ball manufacturer is considering two capacity plans fo
A bowling ball manufacturer is considering two capacity plans for next year: level capacity with inventory and matching demand. The quarterly aggregate demand is shown below for the two plans. The labor standard is 1.6 hours per bowling ball, hiring cost is $600 per worker hired, layoff cost is $400 per worker laid off, carrying cost for finished goods is $5 per bowling ball per year, there is no beginning inventory for the first quarter, 83 workers are employed at the end of the 4th quarter of the previous year, and the company produces bowling balls 8 hours per day, 62 days per quarter. Based on the information given, which capacity plan would you recommend? Assume that the quarterly demand pattern repeats from year to year.
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