Question

In order to use the level capacity strategy, variations in demand are met by?

1) Increasing production capacity
2) Decreasing production capacity
3) Maintaining constant production capacity
4) Outsourcing production

Answer 1

The level capacity strategy is a production strategy where variations in demand are met by maintaining a constant production capacity.

Step-by-step explanation:

The level capacity strategy is a production strategy where variations in demand are met by maintaining a constant production capacity. This means that the company keeps its production capacity consistent regardless of fluctuations in demand.

Instead of increasing or decreasing production capacity, the company adjusts other factors to meet variations in demand. For example, the company may adjust its workforce by scheduling more or fewer shifts, or it may adjust its inventory levels to buffer against fluctuations in demand.

By maintaining a constant production capacity, the company can ensure a more stable operation and utilize its resources effectively.