Toy World, Inc. is a company that manufactures plastic toys for children. It creates toys of many different areas including toy cars, trucks, construction equipment, rockets, spaceships, animals, rockets, etc. The company as a whole has been doing quite well since it opened in 1990 and has experience profitability since early 1993. Although they have been doing satisfactory, there is always room for improvement. They are currently pondering the idea of switching their scheduling production from seasonal to a more level production. It is believed that by switching it will save the company substantial amount of funds and help reserve its factory equipment. Also, they are and need to find a solution to the current loan agreement they have with their bank to coincide with this new plan. Adopting a policy of level monthly production was the idea of Toy World Inc.’s Production manager, Mr. Hoffman. He has stated multiple issues with the current production schedule and exclaimed projected ideas & results with the new level policy. Current problems arising from the seasonal production schedule include overtime premiums reducing profits, seasonal expansion and contraction of the work force resulted in recruiting difficulties and high training/quality costs, machinery was idle for months at a time and subjected to heavy use, frequent set up changes in the machinery, confusion in scheduling runs, and frequent setup changes that resulted in inefficiencies in assembly and packaging. Mr. Hoffman believes that by switching to a monthly level production those overtime premiums will be reduced and result in great savings, and there will be additional savings with regard to direct labor. Instead of COGS being 70% of sales it is now 65.1%. Slightly lower but still a definite change. The only exceptions with the level monthly production schedule is that savings would be