MacPherson company is being faced with a situation of tight capacity at the Stratford plant which is currently at 13,000 units per month. There are two recommendations on how the company can mitigate the problem. The first recommendation is that the company should change its workforce level several times in a year while the second recommendation is that MacPherson invests $0.5M to increase the production capacity to 15,000 units per month. The labor union and some managers insist that the company should invest in increasing the production capacity instead of implementing the first option as it would lead to disruptive hiring and layoff.The recommendation to increase the production capacity to 15,000 units per month with a $0.5M investment will pay itself off within one year with the reduction in headcounts, new hires, and layoffs. Yes, I agree with the recommendation. Here is a detailed explanation:Investment in production capacity will reduce the per-unit cost of production which will allow the company to make more profits on each unit produced. With the increase in production capacity, the company will be able to produce more goods with the same amount of resources, and this will lead to a reduction in production costs. The reduction in production costs means that the company will be able to sell its goods at a lower price which will, in turn, increase demand for the products.With the increased demand for the product, the company will sell more and make more profits. The company will be able to meet the market demand for the product without any interruption which means there will be no need for hiring or layoffs. This reduction in hiring and layoffs will reduce the disruption that may be caused in the production process. The reduction in hiring and layoffs will also lead to a reduction in the cost of recruitment and training of new staff.The investment of $0.5M will pay for itself within one year because the reduction in the cost of production, hiring, and layoffs will offset the initial investment.