Which basic production planning strategy will build inventory and avoid the costs of excess capacity?
A) demand matching (chase)
B) production leveling
C) subcontracting
D) all the above
E) none of the above

Question

Quizplus · Accepted Answer

Production leveling aims to build inventory during low demand periods and avoid excess capacity during high demand periods. This helps to reduce holding costs associated with excess inventory and also minimizes the need for expensive overtime or temporary labor when demand spikes. Demand matching (chase) and subcontracting, on the other hand, are not necessarily aimed at building inventory and may not be the best strategies for avoiding the costs of excess capacity.

Which Basic Production Planning Strategy Will Build Inventory and Avoid