Which of the following is an advantage of producing at average demand levels?
A) inventory fluctuates
B) allows for a lower investment in capacity
C) minimizes space needs for inventory
D) minimizes finished good holding costs
E) makes it difficult to calculate average production

Question

Quizplus · Accepted Answer

Producing at average demand levels allows for a lower investment in capacity because it avoids the need to build capacity for peak demand, thus optimizing resource utilization.

Which of the Following Is an Advantage of Producing at Average