Which one of the following statements about aggregate planning is best?
A) When a firm wants to minimize its inventory investment, it should use a level production planning strategy.
B) When a firm wants to emphasize stability in its workforce, it should adopt a level production planning strategy.
C) A make-to-stock production plan that wants to emphasize plant utilization should adopt a chase production strategy.
D) A make-to-stock production plan that wants to minimize changes in production rates should adopt a chase production planning strategy.

Question

Quizplus · Accepted Answer

Level production planning strategy emphasizes stability in the workforce by maintaining a constant level of production and avoiding overstaffing or layoffs. Option A is incorrect because a level production strategy could result in excess inventory if demand fluctuates. Option C is incorrect because a chase production strategy prioritizes meeting customer demand and may result in underutilized capacity if demand is low. Option D is incorrect because a chase production strategy involves changing production rates to match demand, which is the opposite of what is desired when minimizing changes in production rates.

Which One of the Following Statements About Aggregate Planning Is