Total Cost of Level and Chase Plan
Togo makes lawn mowers and tractors. The company's expected quarterly demand is given below in the chart. The company will have 300 mowers in inventory at the beginning of the month and desires to maintain at least that number at the end of each month. Below is other critical data:
-Production cost per unit $200
-Inventory carrying cost per month per unit $60 (based on ending month inventory)
-Hiring cost per worker $500
-Firing cost per worker $750
-Beginning number of workers 40
-Each worker can produce 100 units per quarter.