A firm practices a pure level strategy that sets the production level at the average demand over the next four periods. Inventory last quarter was 0. The extra units produced are stored in a warehouse. The extra units needed are subcontracted. Demand over the next four quarters is estimated to be 974, 812, 1,144, and 1,028. Production cost is $23 per unit, and Inventory cost is $7 per unit. What is the production cost at this firm?
