Reconsider the Skycell data in Exercise II, AS2. Assume that the plant has 1,250 employees and a no-layoff policy. Overtime is limited to 20 hours per employee per month. A third party has offered to produce cell phones as needed at a cost of $25 per unit (this includes component costs of $20 per unit). How many units must be acquired from this option?

Skycell, a major European cell phone manufacturer, is making production plans for the coming year. Skycell has worked with its customers (the service providers) to come up with forecasts of monthly requirements (in thousands of phones) as shown in Table 8-10. Manufacturing is primarily an assembly operation,and capacity is governed by the number of people on the production line. The plant operates for 20 days a month, eight hours each day. One person can assemble a phone every 10 minutes. Workers are paid 20 euros per hour and a 50 percent premium for overtime. The plant currently employs 1,250 workers. Component costs for each cell phone total 20 euros. Given the rapid decline in component and finished-product prices, carrying inventory from one month to the next incurs a cost of 3 euros per phone per month. Skycell currently has a no-layoff policy in place. Overtime is limited to a maximum of 20 hours per month per employee. Assume that Skycell has a starting inventory of 50,000 units and wants to end the year with the same level of inventory.

A)1,650,000 units

B)1,050,000 units

C)355,000,000 units

D)360,400,000 units

TABLE 8-10 Monthly Demand for Cell Phones, in Thousands Month Demand January February March April May 1,000 1,100 1,000 1,200 1,500 1,600 1,600 900 June July August September October 1,100 800 November 1,400 1,700 December