Compute the costs associated with level production

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Reference no: EM13108586

Henderson Furniture sells reproductions of 18th century furniture. For a particular table, the following information is valid. Month | Demand Jan 81 Feb 89 Mar 100 Apr 130 May 97 Jun 126 Jul 96 Aug 93 Sep 78 Oct 127 Nov 78 Dec 69 Production for last quarter was 70. Holding Cost=$200 per table per year Backorder Cost = $50 per table per year Hiring Cost=$25 per unit Firing Cost=$30 per unit
a. Calculate the costs associated with level production and chase production strategies.
b. Which strategy do you recommend?

Reference no: EM13108586

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