Suppose we wish to setup a production plan for the CA&J Company for the next three months. We are given the following information:

	January	February	March	Totals
Demand forecast	750	1200	950	2900
Number of working days	22	19	21	62
			Costs
Materials			$150,00		/unit
Inventory holding cost			$15,00		/unit / month
Marginal cost of stockout			$30,00		/unit / month
Hiring and training cost			$75,00		/worker
Layoff cost			$200,00		/worker
Labor hours required			3		/unit
Straight-time cost			$12,50		/hour

If the inventory at the beginning of the first period is 250 units;

1. Produce to exact monthly productions requirements using a regular eight-hour day by varying workforce size. (Suppose that the initial workforce level is equal to the number that will satisfy the first months demand.)
2. Produce to meet expected demand over the next three months by maintaining a constant workforce. (This constant number of workers is given as 12 workers.)