A basic strategy for managing capacity when the firm utilizes a constant amount of capacity regardless of demand variations is:
A)Level demand strategy
B)Differentiation demand strategy
C)Chase demand strategy
D)Baumol's demand strategy

Question

A basic strategy for managing capacity when the firm utilizes a constant amount of capacity regardless of demand variations is:
A)​Level demand strategy
B)​Differentiation demand strategy
C)​Chase demand strategy
D)​Baumol's demand strategy

Quizplus · Accepted Answer

The level demand strategy is the best choice when the firm utilizes a constant amount of capacity regardless of demand variations. This strategy involves producing at a constant rate, regardless of changes in demand, and using inventory to handle any variation. By maintaining a constant level of production, the firm can achieve economies of scale, reduce costs, and maintain a stable workforce. This strategy is suitable for firms with relatively stable demand patterns, and where the cost of inventory is relatively low.

A Basic Strategy for Managing Capacity When the Firm Utilizes