For the level aggregate plan, fluctuations in demand are absorbed by ________________.
A) inventory and subcontracting
B) back orders and price changes
C) inventory and back orders
D) price changes and subcontracting
E) subcontracting and back orders

Question

Quizplus · Accepted Answer

The level aggregate plan aims to maintain a constant rate of output over the planning horizon, and fluctuations in demand can be absorbed by building up or drawing down inventory levels and using back orders to meet customer demand during times of high demand. Subcontracting and price changes would not be appropriate options for absorbing demand fluctuations in a level aggregate plan.

For the Level Aggregate Plan, Fluctuations in Demand Are Absorbed