Jones Inc. is preparing an aggregate production plan for next year. The company expects demand to be 1,500 units in quarter 1; 2,500 units in quarter 2; 4,500 units in quarter 3; and 3,500 units in quarter 4. The company will have 100 units in inventory at the beginning of the year and desires to maintain at least that number at the end of each quarter as safety stock. Assume hiring and layoff/firing, if necessary, occur at the beginning of the quarter. Other information:

Regular production labor cost = $150 per unit

Overtime production cost per unit = $225

Inventory carrying cost = $10/unit/quarter based on quarter-ending inventory

Hiring cost = $4,500 per worker

Firing/layoff cost = $5,000 per worker

Beginning number of workers = 15

Each worker can produce 100 units per quarter.

a-1. Given the planning information, develop a level production plan and a chase production plan. (Leave no cells blank - be certain to enter "0" wherever required.)

Level production plan
Quarter	Demand	Regular Production	Overtime/Subcontract Production	Ending Inventory	Workers Required	Hire	Fire layoff
1	1,500
2	2,500
3	4,500
4	3,500
Total	12,000

a-2. What is the total cost of a level plan?

Total cost

b-1. Given the planning information, develop a chase production plan utilizing hiring and firing. (Leave no cells blank - be certain to enter "0" wherever required.)

Chase Plan - Variable Workforce
Quarter	Demand	Regular Production	Overtime/Subcontract Production	Ending Inventory	Workers Required	Hire	Fire layoff
1	1,500
2	2,500
3	4,500
4	3,500
Total	12,000

b-2. What is the total cost of a chase plan utilizing hiring and firing?

Total cost

c-1. Suppose Jones' management is reluctant to constantly change the workforce by hiring and firing. The company decides to hire five additional workers at the beginning of the year. The company will build inventory in low-demand months and use it in high-demand months. In addition, if necessary, overtime will be used to meet demand requirements if there is not sufficient inventory available. (Leave no cells blank - be certain to enter "0" wherever required.)

Quarter	Demand	Regular Production	Overtime/Subcontract Production	Ending Inventory	Workers Required	Hire	Fire layoff
1	1,500
2	2,500
3	4,500
4	3,500
Total	12,000

c-2. What is the total cost of this plan?

Total cost