Sam Song Electronics is preparing to launch its new “Galaxy‑…
Sam Song Electronics is preparing to launch its new “Galaxy‑V” smartphone in the first half of 2026. The marketing team has produced a month‑by‑month demand forecast (in units) based on market‑research studies and last‑quarter sales data. Month Forecasted Demand Jan 10 000 Feb 9 950 Mar 10 100 Apr 10 200 May 10 050 Jun 10 150 Sam Song is planning to use a pure chase strategy – production is adjusted each month to meet demand exactly. The company’s starting inventory level at the start of January is 200 units, and its workforce from the previous month (Dec) capable of producing 9500 units per month. The cost structure for the period is as follows: Item Cost per unit Hiring Labor (adds 1 unit of capacity) $80 Firing Labor (removes 1 unit of capacity) $60 Monthly inventory holding $25 Lost‑sale (stock‑) $700 Assume that any worker hiring or firing takes effect immediately for the remainder of the planning horizon. Under the above “pure chase” production strategy, which of the following statements is correct?