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Which of the following are benefits of level capacity loading?

A. Maximizes work-in-process inventory
B. Minimizes time to setup for different products
C. Limits the flexibility to meet customer demand
D. Minimizes work-in-process inventory
E. Maximizes work-in-process inventory

User Roger Cruz
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1 Answer

5 votes

Final answer:

Level capacity loading is a strategy that minimizes work-in-process inventory and maximizes workforce and equipment efficiency while maintaining a predictable production schedule. It does not aim to maximize work-in-process inventory or necessarily improve flexibility in meeting customer demand.

Step-by-step explanation:

The question pertains to the benefits of level capacity loading, a production strategy used by companies to maintain a consistent production rate, rather than fluctuating output in response to changing demand. The correct benefits of level capacity loading include:

  • Minimizes work-in-process inventory: By keeping production levels steady, companies can avoid the buildup of excess inventory, which ties up capital and can result in additional costs.
  • Maximizes efficiency in workforce and equipment utilization, thereby reducing the need for frequent setup changes, which aligns with minimizing time to setup for different products.
  • Limits the need for excessive inventory space and helps in maintaining a more predictable production schedule.

Options A and E should be dismissed, as they suggest maximizing work-in-process inventory, which is contrary to one of the aims of level capacity loading. Option C is not a benefit but a drawback since level capacity loading can indeed limit the flexibility to meet customer demand when it changes abruptly.

User Purzynski
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9.0k points
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