Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled thefollowing cost data and demand forecast:Click the icon to view the demand forecast.E Click the icon to view the cost data.John's job is to develop an aggregate plan. The three initial options he wants to evaluate are:• Plan A: a strategy that hires and fires personnel as necessary to meet the forecast.• Plan B: a level strategy.• Plan C: a level strategy that produces 1,000 cases per quarter and meets the forecast demand with inventory and subcontracting.a) Which strategy is the lowest-cost plan?Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers).Hiring and Layoff PlanLayoff(Units)HireQuarterForecastProductionInits)1,30011,700Costs/Other DataPrevious quarter's output = 1,300 casesBeginning inventory = 0 casesStockout cost of backorders = $140 per caseInventory holding cost = $45 per case at end of quarterHiring employees = $40 per caseTerminating employees = $70 per caseSubcontracting cost = $65 per caseUnit cost on regular time = $25 per caseOvertime cost = $20 extra per case%3D%3DQuarterForecast%3D11,700%3D1,10031,50041,000Capacity on regular time = 1,700 cases per quarter%3D

Answered: a) Which strategy is the lowest-cost…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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a) Which strategy is the lowest-cost plan? Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers). Hiring and Layoff Plan Hire Layoff (Units) Quarter Forecast Production (Units) 1,300 1 1,700