Question

assume you have been assigned the task of identifying a level strategy aggregate production plan for the coming year. you have been informed that beginning inventory is 2,000 units, your plan should provide an ending inventory for the year equal to 500 units, and you have been provided the following forecasts of aggregate demand. what should be the planned rate of quarterly production?

Answer 1

To determine the planned rate of quarterly production in a level strategy aggregate production plan, one would sum the aggregate demand for the year, adjust for beginning and ending inventories, and divide that total by the number of quarters to maintain a consistent production rate.

Step-by-step explanation:

The student's question is about creating an aggregate production plan using a level strategy, which is a topic within operations management, a subject of business studies. To devise the planned rate of quarterly production, we would need information about the quarterly forecasts for aggregate demand. Since the specific numbers are not provided in the question, I will outline the general approach to this scenario:

Firstly, total up the aggregate demand forecasts for all the quarters of the coming year. Secondly, subtract the beginning inventory and add the desired ending inventory to this sum. This adjusted total represents the total amount of products to be produced for the year. Finally, divide this total by the number of quarters in the year to find the average rate of production per quarter. The planned quarterly production rate will be consistent in a level strategy approach, where the same number of units are produced each quarter regardless of fluctuations in demand.