A)

Months Mar Apr May Jun Jul Aug Sep

Demand 50 44 55 60 50 40 51 350
Regular Capacity 40 40 40 40 40 40 40 280
Over time 8 8 8 8 8 3 8 51
Subcontracting 2 0 3 12 2 0 0 19
Output – Forecast 0 4 0 0 0 3 0
Beginning inventory 0 0 4 0 0 0 3
Ending inventory 0 4 0 0 0 3 0
Average inventory 0 2 2 0 0 1.5 1.5
Backlog 0 0 0 0 0 0 0

Cost
Regular Cost 3200 3200 3200 3200 3200 3200 3200
Inventory Cost 0 20 20 0 0 15 15
Over time 960 960 960 960 960 360 960
Subcontracting 280 0 420 1680 280 0 0
Total 31250
Total
Cost
Normal Output 80
70 Inverntory Carrying 10
Over time 120
Subcontracting 140

Based on total cost this is plan is better than the alternative level strategy
 A)
Months Mar Apr May Jun Jul Aug Sep
Demand 50 44 55 60 50 40 51 350
Regular Capacity 40 40 40 40 40 40 40 280
Over time 0 0 0 0 0 0 0 0
Subcontracting 10 12 12 12 12 1 11 70
Output – Forecast 0 8 5 -3 -1 0 0
Beginning inventory 0 0 8 5 0 0 0
Ending inventory 0 8 5 0 0 0 0
Average inventory 0 4 6.5 2.5 0 0 0
Backlog 0 0 0 3 1 0 0

Cost
Regular Cost 3200 3200 3200 3200 3200 3200 3200
Inventory Cost 0 40 65 25 0 0 0
Back log 0 0 0 60 20 0 0
Subcontracting 1400 1680 1680 1680 1680 140 1540
Total 32410
Total
Cost
Normal Output 80
70 Inverntory Carrying 10
Over time 120
Subcontracting 140
Backlog 20