Question

Which one of the following actions applies to a level strategy?

Question options:

Build anticipation inventory to meet the variability in demand.

Decrease production output to match any decreases in demand requirements.

Hire workers to increase production output to match increases in demand requirements.

Use promotional campaigns to boost demand.

Answer 1

• Decrease production output to match any decreases in demand requirements.

Step-by-step explanation:

A level strategy aims to maintain a consistent production output over a period of time, regardless of fluctuations in demand. This strategy involves adjusting production levels to match the average or expected demand, smoothing out the production process. If there is a decrease in demand, a level strategy would respond by reducing production output to avoid excessive inventory buildup. This helps to maintain inventory levels in line with the anticipated demand, avoiding excess costs and waste.

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