Frito-Lay uses aggregate planning to match capacity with demand because of the ________ associated with its specialized processes.
A) high variable cost and high fixed cost
B) high variable cost and low fixed cost
C) low variable cost and high fixed cost
D) low variable cost and low fixed cost
E) none of these

Question

Quizplus · Accepted Answer

Frito-Lay likely has low variable costs due to economies of scale in producing large quantities of products, but high fixed costs associated with specialized equipment and facilities needed for their production processes. Aggregate planning helps them efficiently align production capacity with demand fluctuations to manage these costs.

Frito-Lay Uses Aggregate Planning to Match Capacity with Demand Because