A firm's demand in the next four quarters (its aggregate planning horizon) is forecast to be 80, 50, 40, and 90 units. Last quarter, the firm produced 60 units. If it uses level scheduling, the firm will.
A) hire workers to permit production of 65 units per quarter for the next four quarters
B) hire 20 workers
C) have an increase in inventory of 20 units in the next quarter
D) have a decrease in inventory of 5 units in the next quarter
E) change its workforce each quarter so that inventory does not change

Question

Quizplus · Accepted Answer

Level scheduling means producing at a constant rate regardless of demand fluctuations. The total demand over the next four quarters is 80 + 50 + 40 + 90 = 260 units. Dividing this by 4 quarters gives 65 units per quarter.

A Firm's Demand in the Next Four Quarters (Its Aggregate