Plan #1 Producing at a constant level: 50 units per day by 10 workers (1 unit = 1.6 labor-hours to produce, and the company has 8 working hour per day) Cost Profile Inventory carrying cost 5 s per unit per month Subcontracting cost per 20 S per unit Average pay rate 10 $ per hour (8 hrs per day regular time) Overtime pay rate 17 S per hour [above 8 hours per day Labor-hours to produce a 1.6 S per hour per unit Cost of increasing daily 300 s per unit Cost of decreasing daily 600 S per unit FRODUCTION AT 50 UNITS PER ENDING MONTH DEMAND FORECAST FRODUCTION DAYS MONTHLY INVENTORY DAY CHANGE INVENTORY 900 22 41 700 Mar 21 38 Apr 1200 21 May 1500 22 EE Tune 1100 20 124 Cost Profile COST ITEM CALCULATIONS Inventory carrying So [=1,830 units carried x $5 per unit Regular-time labor HVALVE! = 10 workers * 580 per day * 124 days Other costs overtime, hiring. Total cost AVALUE