Which of the following is a disadvantage of a level capacity plan?
A)stable employment
B)low per-unit costs
C)high rate of capacity utilization
D)high levels of inventory during slack demand

Question

Quizplus · Accepted Answer

A level capacity plan is characterized by maintaining a constant and steady level of production regardless of fluctuations in demand. This can lead to high levels of inventory during slack demand, which can result in increased storage costs, reduced cash flow, and the risk of holding obsolete inventory. Therefore, D is a disadvantage of a level capacity plan. The other options are actually advantages of a level capacity plan: stable employment, low per-unit costs, and high rate of capacity utilization.

Which of the Following Is a Disadvantage of a Level