Which of the following statements regarding aggregate planning is TRUE?
A) In a pure level strategy, production rates or workforce levels are adjusted to match demand requirements over the planning horizon.
B) A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies.
C) Mixed strategies in aggregate planning may utilize inventory, workforce, and production rate changes over the planning horizon.
D) Because service firms have no inventory, the chase strategy does not apply.
E) A disadvantage of the option of changing inventory levels is that it forces abrupt production changes.

Question

Quizplus · Accepted Answer

Mixed strategies in aggregate planning can utilize a combination of inventory, workforce, and production rate changes over the planning horizon, providing flexibility to meet varying demand requirements. Pure level and pure chase strategies are more rigid and may not be able to efficiently meet demand fluctuations. The statement in option D is not entirely true, as some service firms may still have to consider staffing levels to match demand. Option A is incorrect as it describes a pure level strategy, not a statement regarding aggregate planning in general. Option B may not be true, as a pure level strategy may require higher inventories to meet demand during peak periods. Option E is incorrect as changing inventory levels is a potential advantage of mixed strategies, as it allows for smoother production changes rather than abrupt ones.

Which of the Following Statements Regarding Aggregate Planning Is TRUE