Which one of the following statement about sales and operations planning is best
ID: 384572 • Letter: W
Question
Which one of the following statement about sales and operations planning is best?
A make-to-stock production plan that wants to emphasize plant utilization should adopt a chase production strategy
A make-to-stock production plan that wants to minimize changes in production rates should adopt a chase production planning strategy
When a firm wants to minimize its inventory investment, it should use a level production-planning strategy
When a firm wants to emphasize stability it its workforce, it should adopt a level production-planning strategy
Explanation / Answer
Answer is D) When a firm wants to emphasize stability in its workforce, it should adopt a level production-planning strategy
In a Level production plan, the workforce is kept constant which ensures a constant production rate irrespective of the demand. The costs incurred in such cases is inventory holding costs, stockout costs etc.
This ensures and emphasizes stability in the workforce of the firm without hiring and layoffs frequently.
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