Obtain remainder from overtime

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Reference no: EM1376673

Q. Eagle Fabrication has subsequent aggregate demand requirements also o r data for upcoming four quarters.

Quarter Demand Previous quarter's output 1500 units
1 1400 Beginning inventory 200 units
2 1200 Stock out cost $50 per unit
3 1500 Inventory holding cost $10 per unit at end of quarter
4 1300 Hiring workers $4 per unit
Firing workers $8 per unit
Unit cost $30 per unit
Overtime $10 extra per unit

Which of subsequent production plans is better: Plan A-chase demand by hiring also firing; or Plan B-make at a constant rate of 1200 also obtain remainder from overtime?

Reference no: EM1376673

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