The marketing department has given the following data for the next 6 months for PENA NIAGA Sdn. Bhd. : Demand (Units) January 500 February 590 March 690 April 620 May 580 June 620 Additional information: Holding: RM5 per unit Subcontracting: RM65 per unit Regular-time labor: RM10 per unit Hiring: RM50 per unit Layoff: 60 per unit Assume zero ending inventory. a) Based on the above information, calculate the total cost by using the following strategies: i) Strategy 1 – A level production strategy. (6 marks) ii) Strategy 2 – A chase strategy by hiring and layoffs. (6 marks) ii) Strategy 3 – Produce a constant rate at 580 units and subcontract the remainder to meet demand. (6 marks) b) Which strategy would you recommend and why? (2 marks)
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