Develop a Chase Strategy and a Level Strategy for JXA, based on the following information. The Level Strategy requires that JXA uses a constant workforce equal to the minimum expected demand and subcontracting to meet additional requirements. (Each unit requires 2 hours of production.)
Jun Jul Aug Sep Oct Nov
Beginning Inventory 1500 250 2000 1500 1200 1350
Demand Forecast 1700 1200 1200 800 1800 1600
Number of Working Days by Month 22 22 20 21 20 22
Costs
Materials $350.00 $ per unit
Inventory holding cost $3.50 $ per unit per month
Marginal cost of stockout $25.00 $ per unit per month
Marginal cost of subcontracting $50.00 $ per unit ($120 less $100 material cost)
Hiring and training cost $2000.00 $ per worker
Layoff cost $3500.00 $ per worker
Labor hours required per unit 2.00 $ per unit
Straight-line cost (first eight hours each day) $12.00 $ per hour
Overtime cost $20.00 $ per hour
