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1. David Villa Manufacturing has the following demand aggregate requirements And other data for next four periods: Quarter Forecast 1 1400 2 1200 3 1600 4 1500 COSTS/OTHER DATA Previous quarter's output = 1,300 cases Beginning inventory = 0 cases Stock out cost = $50 per case Inventory holding cost = $10 per case at end of quarter Hiring employees = $40 per case Terminating employees = $80 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $15 extra per case Capacity on regular time = 1,800 cases per quarter The three initial options she wants to evaluate are: Plan A: a strategy that hires and fires personnel as necessary to meet the forecast. Plan B: a level strategy. Plan C: a level strategy that produces 1,350 cases per quarter and meets the forecast demand with inventory and subcontracting. a) Which strategy is the lowest-cost plan? b) If you are the Operations Manager, which plan do you implement and why? 10 Points 1. David Villa Manufacturing has the following demand aggregate requirements And other data for next four periods: Quarter Forecast 1 1400 2 1200 3 1600 4 1500 COSTS/OTHER DATA Previous quarter's output = 1,300 cases Beginning inventory = 0 cases Stock out cost = $50 per case Inventory holding cost = $10 per case at end of quarter Hiring employees = $40 per case Terminating employees = $80 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $15 extra per case Capacity on regular time = 1,800 cases per quarter The three initial options she wants to evaluate are: Plan A: a strategy that hires and fires personnel as necessary to meet the forecast. Plan B: a level strategy. Plan C: a level strategy that produces 1,350 cases per quarter and meets the forecast demand with inventory and subcontracting. a) Which strategy is the lowest-cost plan? b) If you are the Operations Manager, which plan do you implement and why? 10 Points