Eagle Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters.
Quarter Demand Previous quarter's output 1500 units
1 1400 Beginning inventory 200 units
2 1200 Stockout 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 the following production plans is better: Plan A-chase demand by hiring and firing; or Plan B-produce at a constant rate of 1200 and obtain the remainder from overtime?