TerraFoods Organic Market has developed a new line of plant-based protein snacks, and you are tasked with developing its aggregate production schedule. The finance department has provided you with the relevant costs associated with the aggregate plan, while the sales team has supplied a forecast for the next four quarters. All necessary details are presented below: Your job is first to develop an aggregate plan for the next four quarters based on the three following strategies. What will each of the three following strategies cost? Which strategy is the lowest-costplan?
Strategy A:
a strategy that hires and fires personnel as necessary to meet the forecast.
Strategy B:
A strategy that produces 1400 units per quarter to meet the forecast demand. You can produce in overtime only in the first and third quarter and use subcontracting only in the second and last quarter in case of stocking out (Only to meet remaining demand).
Strategy C:
Keep a stable workforce by maintaining a constant production rate equal to 1475 units per quarter and allow varying inventory levels. (Paying stockout cost in case of being stockout)
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