In a level production plan, equipment capacity is set equal to
A) number of trained and qualified operators
B) average demand
C) mean demand
D) maximum number of equipment minus 10% contingency reserves
E) peak demand

Question

Quizplus · Accepted Answer

In a level production plan, the equipment capacity is set equal to the average demand. This means that the production rate is kept constant, even if the demand fluctuates. This allows the company to meet the demand without overproducing or underproducing, leading to more efficient production and inventory management. Therefore, B is the best choice.

In a Level Production Plan, Equipment Capacity Is Set Equal