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Business, 25.03.2021 21:50 eduardavezdemel

A company is interested in developing a quarterly aggregate production plan but they are not sure if a level strategy with backorders or a chase strategy would be better. They have the following information available regarding their production operation: Hiring cost (per unit increase) $40
Firing cost (per unit decrease) $80
Inventory cost (per unit) $40
Stockout cost (per unit) $150
Production (labor) cost (per unit) $30
Subcontracting cost(per unit) $60
Previous quarter's production 1300
Previous quarter's ending inventory (units) 100

Quarter forecasts are 6000, 3000, 4000 and 5000, respectively. Suppose that you want to use a chase plan. What is firing cost of quarter 2?

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