In order to use the level capacity strategy, variations in demand are met by:
A) varying output during regular time without changing employment levels.
B) varying output during regular time by changing employment levels.
C) varying output by changing overtime levels.
D) using combination of inventories, overtime, part time, and back orders.
E) price adjustments.

Question

Quizplus · Accepted Answer

The level capacity strategy involves maintaining a constant production rate, but variations in demand can be met through a combination of inventories, overtime, part-time workers, and backorders. This option allows for flexibility without changing employment levels or incurring excessive overtime costs. Price adjustments are not typically used with the level capacity strategy.

In Order to Use the Level Capacity Strategy, Variations in Demand