3. Hausbuum Sdn Bhd., has a new sparkling real juice drink for which it has high hopes. Farah, the production planner, has assembled the following cost data and demand forecast: Forecast 1,800 Quarter...

Extracted text: 3. Hausbuum Sdn Bhd., has a new sparkling real juice drink for which it has high hopes. Farah, the production planner, has assembled the following cost data and demand forecast: Forecast 1,800 Quarter 1 1,100 3 1,600 900 Costs/other data Previous quarter's output 1,300 cases Beginning inventory = 0 cases Stockout cost = RM 150 per case Inventory holding cost RM 40 per case at end of quarter Hiring employees RM 40 per case Terminating employees RM 80 per case Subcontracting cost = RM 60 per case Unit cost on regular time Overtime cost = RM 15 extra per case Capacity on regular time 1,800 cases per quarter RM 30 per case Farah's job is to develop an aggregate plan. The three initial options she 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 1,200 cases per quarter and meets the forecast demand with inventory and subcontracting. a) Determine the lowest-cost plan? b) If you are Farah's boss, the head for operations, which plan do you implement and why?