The trade-off model shows the x-axis running from smooth or level production at the left to perfect chasing where production matches demand at the right.The total cost curve has a minimum point associated with some degree of chasing.

Question

Quizplus · Accepted Answer

The statement accurately describes the trade-off model and the concept of chasing. The objective is to find the optimal point on the total cost curve that balances the cost of holding inventory and the cost of stockouts. This point is often associated with some level of chasing, where production matches demand more closely.

The Trade-Off Model Shows the X-Axis Running from Smooth or Level