You are developing an aggregate plan for a toolbox maker which sells to professional mechanics. The relevant cost and demand data are shown below:

Holding cost $$8/$toolbox$/$month Month Demand

Subcontract $$80/$toolbox July

$400$

Regular time $$45/$toolbox August $500$

OT Regular time cost plus additional $$20$ per toolbox September $500$

Capacity increase $$50/$unit October $700$

Capacity decrease $$90/$unit November $800$

Backlog cost $$10/$toolbox$/$month December $700$

June capacity and demand $500$ toolboxes

Beginning inventory $0$ toolboxes

Plan A: Try a level strategy where the company produces to the average demand $($of July$-$December$)$ by allowing capacity increases $($hiring$)$ and decreases$($firing$)$ to occur.