The primary cost associated with the level production strategy is the cost of
A)holding inventory.
B)hiring and firing workers.
C)overtime.
D)outsourcing (subcontracting).

Question

Quizplus · Accepted Answer

The primary cost associated with the level production strategy is the cost of holding inventory. This is because with level production, production remains constant regardless of changes in demand. This means that inventory levels will build up during low demand periods, which incurs holding costs such as storage, handling, and the cost of capital tied up in the inventory.

The Primary Cost Associated with the Level Production Strategy Is