69. A company makes three snowblower models - push, self-propelled, and riding. They have forecasted the demand for the three models for the next six months. They want to stabilize the monthly production capacity for each of the six months. Which aggregate planning strategy should they use?
Answer: C
Level aggregate planning
Level aggregate planning is the appropriate strategy for the company as it allows for a stable production rate across the forecasted demand for their snowblower models. By implementing this strategy, the company can maintain a consistent output, aligning production with demand over the six-month period.
A) Subcontracting
Subcontracting involves hiring external vendors to meet production needs, which may lead to variability in production levels and is not suitable for stabilizing monthly production capacity. This option would create dependency on external factors and could disrupt the planned production schedule.
B) Hybrid aggregate planning
Hybrid aggregate planning combines elements of both level and chase strategies, which may introduce unpredictability in production capacity. While it offers flexibility, it does not provide the stability that the company seeks for maintaining consistent production levels over the six-month forecast.
C) Level aggregate planning
Level aggregate planning is the correct choice as it maintains a consistent level of production throughout the period, effectively balancing the forecasted demand without fluctuations in output. This approach helps the company to stabilize their production capacity across the months, thereby aligning resources efficiently.
D) Chase aggregate planning
Chase aggregate planning adjusts production levels to match changing demand, which leads to fluctuating output rates. This strategy would not stabilize production capacity, making it unsuitable for the company's goal of maintaining steady production over the forecast period.
Conclusion
Level aggregate planning is the definitive choice for the company as it allows for a steady production output that aligns with forecasted demand without introducing variability. Other options such as subcontracting, hybrid planning, and chase planning either create instability or do not support the goal of consistent production capacity, making them less effective in this context.