Exercise 2 In this exercise, you need to compare the unit costs of a leveled production strategy with that of a strategy to buy the product from a supplier. Relevant information is presented below. (4pts) Production To prepare an integrated program, a director obtained the demand forecast plan for the next nine months. Month Forecast (units) 190 250 260 280 210 170 160 260 180 Prepare a new production plan and when preparing the new production plan, please take the following information into account: The service currently has 20 full-time people, cach producing 10 units per month, at a cost of $ 6 per unit. Storage costs are $ 5 per unit per month and shortage costs are $ 10 per unit per month. You must hire a new full-time employee. You must decide when to recommend this hiring and justify the choice. The cost of hiring and training is S 475 per person Due to the agreement between the union and the company, you can have access to overtime hours (maximum of 0.6 units/month / employee) during the months when subcontracting is not available. You must end overtime as soon as outsourcing becomes available. The manufacturing of one unit of overtime product is 5 6. Make up for any shortfall by using subcontracting while respecting a maximum of 13 units per period. The cost of manufacturing a unit by subcontracting is $8.50. Subcontracting will be available from the 4th period inclusive, for the rest of the planning period. Your main objective should be to reduce back orders as much as possible while keeping unit cost as low as possible. The company estimates that production will require an investment of $ 1,300 /month in fixed costs. Purchase from a supplier The company can buy the product from a supplier at the same cost as it pays the subcontractor (5 8.50 / unit). The supplier charges an administrative fee of $ 24 on cach order and the company estimates that the order preparation time is 45 minutes. This person is paid S 24/hr. No additional fixed cost must be paid for the purchase of a supplier. Question to be answered: Do you recommend the purchase of a supplier or the production in its own factory? Base your recommendation on unit cost and the advantages and disadvantages of both approaches