A local semiconductor rm, Superchip, is planning its workforce and production levels over next year. The rm makes a variety of microprocessors and uses sales dollars as its aggregate production measure. Based on orders received and sales forecasts provided by the marketing department, the estimate of dollar sales (in $10,000) for the next year by month is as follows:

MONTH	PRODUCTION DAYS	PREDICTED DEMAND
January	22	340
February	16	380
March	21	220
April	19	100
May	23	490
June	20	625
July	24	375
August	12	310
September	19	175
October	22	145
November	20	120
December	16	165

Inventory holding cost is $0.25 per dollar per year. It is anticipated that there will be 675 workers on the payroll at the end of current year and inventories will amount to $120,000. The rm would like to have at least $100,000 of inventory at the end of Dec. next year. It is estimated that each worker accounts for an average of $60,000 of production per year (assume that one year consists of 250 working days). The cost of hiring a new worker is $200, and the cost of laying o a worker is $400.

(a) Determine the minimum constant workforce that will meet the predicted demand for the coming year, and evaluate the cost of this plan.

(b) Determine the cost of the plan that changes the workforce size each period to most closely match the demand, and evaluate the cost of this plan.