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A company would be most likely to apply consumption-based planning for which of the following products?

a. Car
b. Brake
c. Engine
d. Printer
e. Pen.

User MLow
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1 Answer

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Final answer:

A pen is more suitable for consumption-based planning than an engine because it has more predictable consumption patterns, a simpler production process, and higher turnover, aligning better with just-in-time delivery systems.

Step-by-step explanation:

A company will most likely engage in consumption-based planning for products that have predictable consumption patterns and where just-in-time delivery can be effectively implemented. Comparing an engine to a pen regarding consumption-based planning, a pen would be a more suitable candidate. Engines are complex products with a long production cycle and whose consumption patterns are less predictable, often requiring a more significant inventory due to their component variability and intricacies in manufacturing.

Pens, on the other hand, have a high turnover rate, are simple to produce, and face relatively constant demand, making them more amenable to consumption-based planning strategies. The nature of the products in terms of complexity, consumption predictability, and ease of production generally dictates the ideal inventory approach. In this context, a pen is more compatible with the approach of aligning procurement and production with actual consumption data.

User Rajesh Naroth
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