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Washington Laundry Products, Inc., makes commercial and industrial laundry machines (the kinds hotels use), and has these aggregate demand requirements for the next six months. The firm has regular capacity for 200 units, and overtime capacity for 40 more. Currently, subcontracting can supply up to 100 units per month, but the subcontracting firm may soon be unavailable.

Month	Demand		Costs and other data
1	220		Previous output level	150 units
2	160		Beginning inventory	100 units
3	200		Stockout cost	$250 per unit
4	210		Inventory holding cost	$100 per unit at end of month
5	200		Unit Cost, regular time	$1,200 per unit
6	190		Subcontracting	$2,000 per unit
			Unit Cost, overtime	$1,500 per unit
			Hiring workers	$200 per unit
			Firing workers	$500 per unit

Which is cheaper:

to use a pure level strategy to meet demand

to use a pure chase strategy to meet demand

to produce a base quantity of 120, using first, overtime, then subcontracting, to meet demand