Determine the total cost of production

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Reference no: EM13109271

Aggregate demand for a product family is given in the table below for the 4 quarters of 2007. Production costs on regular time are $70 per unit. There are costs associated with labor fluctuation: When production levels increase from one quarter to the next hiring costs are represented as a cost of $15 per unit of increase. When production levels decrease from one quarter to the next, firing or termination costs are represented as a cost of $14 per unit of decrease.

Quarter	Demand	Production	Production Increase	Production decrease
Q4 06		900
Q1 07	1,000	?	?	?
Q2 07	700	?	?	?
Q3 07	900	?	?	?
Q4 07	1,100	?	?	?

If the aggregate plan calls for "producing to demand", equivalently "a chase strategy", determine the total cost of production for 2007.

Reference no: EM13109271

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