Demand for Quiggly Pops follows an up and down pattern over the four quarters of a year,
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Question:
Demand for Quiggly Pops follows an up and down pattern over the four quarters of a year, with peaks in the spring and winter months when special promotions are held. Production is handled by a highly skilled local workforce during a regular hour week ie overtime and subcontracting are not used The company likes to zero out its inventory at the end of a year so that it can start fresh each January. QP currently uses a level production strategy but would like to evaluate other options. The cost and demand figures are given below. Beginning workforce workers; Production per employee units per quarter; Hiring cost $ per worker; Firing cost $ per worker; Inventory carrying cost $ per unit per quarter; Regular production cost $ per unit; Demand Qtr ; Demand Qtr ; Demand Qtr ; Demand Qtr What is the cost of a level production strategy?
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