02 - . - ABCO makes snow blowers for the consumer market. Below is their forecast for the first 6 months next year. They are interested in using level strategy to produce their needs. Beginning Inventory is 50 units. Inventory holding costs are $20 per unit per month. Backorder costs are $30 per unit per month. Regular labour is $75 per unit. Calculate the cost of this plan. Use formulas for all calculations. (5 marks) . 1 2 3 5 6 4 600 Total 625 500 500 550 600 525 525 525 525 525 525 Month o Forecast 1 Output 2 Regular 3 Part Time 4 Overtime 5 Subcontract 5 Output - Forecast 7 Inventory B Beginning 3 Ending Average 1 Backorder 2 Costs: 3 Regular 4 Part Time 5 Overtime 5 Subcontract 7 Hire/Layoff B Inventory 3 Back orders Total 1 $75 4 2 3 ABCO hopes to avoid backorders and instead use overtime to make up any shortages to try and avoid backorders. Overtime costs $125 per unit. Calculate the cost of this plan. Use formulas for all calculations. Beginning inventory is -4 5 6 Month 1 2 5 6Total 7 Forecast 500 500 550 600 600 625 8 Output 9 Regular 525 525 525 525 525 525 -0 Part Time -1 Overtime -2 Subcontract -3 Output - Forecast 14 Inventory -5 Beginning -6 Ending -7 Average 8 Backorder -9 Costs: FO Regular $75 51 Part Time 2 Overtime $125 3 Subcontract -4 Hire/Layoff 5 Inventory -6 Back orders 7 Total 8 O u 000