$...13\mathrm{.}9$ Mary Rhodes, operations manager at Burnaby Furniture, has received the following estimates of demand requirements:$100012001400180018001600$a$.$ Assuming stockout costs for lost sales of $$100$ per unit, inventory carrying costs of $$25$ per unit per month, and zero beginning and ending inventory, evaluate these two plans on an incremental cost basis:$*$ Plan A: Produce at a steady rate $($equal to minimum requirements$)$ of $1000$ units per month and subcontract additional units at a $$60$ per unit premium$*$ Plan B: Vary the workforce, which performs at a current production level of $1300$ units per month. The cost of hiring additional workers is $$3000$ per $100$ units produced. The cost of layoffs is $$6000$ per $100$ units cut back. Pyb$.$ Which plan is best and why?... $13\mathrm{.}16$ A large Saskatchewan feed mill, B$.$ Swart Processing, prepares its six$-$month aggregate plan by forecasting demand for $50-$pound bags of cattle feed as follows: January, $1000$ bags; February, $1200$; March, $1250$; April, $1450$; May, $1400$; and June, $1400.$ The feed mill plans to begin the new year with no inventory left over from the previous year, and backorders are not permitted. It projects that capacity $($during regular hours$)$ for producing bags of feed will remain constant at $800$ until the end of April, and then increase to $1100$ bags per month when a planned expansion is completed on May $1.$ Overtime capacity is set at $300$ bags per month until the expansion, at which time it will increase to $400$ bags per month. A friendly competitor in Alberta is also available as a backup source to meet demand$-$but can provide only $500$ bags total during the six$-$month period. Develop a six$-$month production plan for the feed mill using the transportation method.Cost data are as follows:Regular$-$time cost per bag $($until April $30)$$$12\mathrm{.}00$Regular$-$time cost per bag $($after May $1)$$$11\mathrm{.}00$Overtime cost per bag $($during entire period$)$$$16\mathrm{.}00$Cost of outside purchase per bag$$18\mathrm{.}50$Carrying cost per bag per month$ $1\mathrm{.}0013\mathrm{.}22$ WestJet's daily flight from Edmonton to Toronto uses a Boeing $737,$ with all$-$coach seating for $120$ people. In the past, the airline has priced every seat at $$140$ for the one$-$way flight. An average of $80$ passengers are on each flight. The variable cost of a filled seat is $$25.$ Katie Morgan, the new operations manager, has decided to try a yield$-$revenue approach, with seats priced at $$80$ for early bookings and at $$190$ for bookings within one week of the flight. She estimates that the airline will sell $65$ seats at the lower price and $35$ at the higher price. Variable cost will not change. Which approach is preferable to Ms$.$ Morgan?