Which production planning method maintains a stable inventory level while production is varied to meet demand?

• A. Level production
• B. Chase production method
• C. Mixed production
• D. Push system

Answer: (B)

The key idea is adjusting how much you produce to match actual demand in each period while keeping the finished-goods inventory around a stable target. The chase production method does exactly that: you vary production up or down to follow demand, so you don’t build up large inventories when demand is high or run out when it’s low. Production changes keep pace with demand, keeping inventory levels relatively steady.

In contrast, level production keeps output constant and uses inventory to buffer demand fluctuations, which causes inventory to rise and fall as demand changes. A mixed approach blends the two, and a push system centers on moving work based on forecasts rather than actual demand, not specifically about stabilizing inventory. So, to maintain a stable inventory while production varies to meet demand, chase production is the best fit.