Using the information is problem 13.3, develop plan B. Produce at a constant rate of 1,400 units per month, which will meet minimum demands. Then use subcontracting, with additional units at a premium price of $75 per unit. Evaluate this plan by computing the costs for January through August.
In problem 13.3, The president of Hill Enterprises, Terri Hill, projects the firm€™s aggregate demand requirements over the next 8 months as follows:

Her operations manager is considering a new plan, which begins in January with 200 units on hand. Stockout cost of lost sales is $100 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-times costs. The plan is called plan A.
Plan A: Vary the workforce level to execute a €œchase€ strategy by producing the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $5,000 per 100 units. The cost of laying off workers is $7,500 per 100 units. Evaluate thisplan.

anl. Feb. Mar. Apr. 1,400 May 1,600 June 1,800 July 1,800Aug 2,200 2,200 1,800 1,400