Care Alliance (CA), a manufacturer of emergency care kits for disaster relief, has received the annual disaster readiness plans from its major constituents and now must develop an operations plan to set production, labor, and inventory levels of its basic emergency products for the next four quarters. Demand for the kits, given below, varies with seasonal weather, political climate, and economic conditions. The average worker at CA can produce 10,000 kits a quarter at a cost of $9 per kit. The cost of holding inventory is $2 per kit per quarter. Due to the medical nature of many of its products and concern for quality, hiring and fi ring costs are $700 per worker. CA currently employs 20 workers. Given the demand forecast below, develop a quarterly operations production plan for CA using

(a) Chase demand

(b) Level production.

QUARTER                         DEMAND
1...........................................150,000
2...........................................250,000
3...........................................350,000
4...........................................250,000