Two basic types of decision alternatives are used to arrive at acceptable production or staffing plans: supply options and demand options. If an organization that faces seasonal demand uses a supply option approach, which one of the following actions is it most likely to implement?
A) introduction of complementary products
B) creating a stock of anticipation inventory
C) advertising to generate demand during off-peak periods
D) discounting products in off-peak periods

Question

Quizplus · Accepted Answer

A supply option approach involves creating a stock of anticipation inventory to meet the anticipated high demand during peak periods. This helps to maintain the required production level during such periods, without having to drastically increase staffing or production capacity. The other options listed are demand option approaches, aimed at generating demand during off-peak periods.

Two Basic Types of Decision Alternatives Are Used to Arrive