QUESTION 1

COMPLETE THIS QUESTION IN A MICROSOFT WORD DOCUMENT AND UPLOAD IN MOODLE

Demand for Sweet Tooth Limited follows a seasonal pattern growing through the fall months and culminating in December, with small peaks in January (for after season mark-downs, exchange and accessory purchases) and July (for Christmas-in-July specials).

Month	Demand (cases)	Month	Demand (cases)
January	1000	July	500
February	400	August	500
March	400	September	1000
April	400	October	1500
May	400	November	2500
June	400	December	3000

Each worker can produce on average 100 cases of cakes each month. Overtime is limited to 300 cases, and subcontracting is unlimited. No cases of cakes are currently in inventory. The wage rate is $10 per case for regular production, $15 for overtime production, and $25 for subcontracting. No stock out are allowed. Holding cost is $1 per case per month. Increasing the workforce costs approximately $1,000 per worker. Decreasing the workforce costs $500 per worker. Management would like to know the cost for the following scenarios:

a. The cost for the level production over the 12 month.

b. The cost to produce to meet demand each month.

c. The cost to increase or decrease the workforce in five-worker increments.