Which production planning method maintains a stable production rate while allowing inventory to vary to meet demand?

• A. Level schedule
• B. Load
• C. Level production method
• D. Line-haul costs

Answer: (C)

The main idea being tested is using a constant production pace while letting inventory absorb demand fluctuations. This approach, known as the level production method, sets a fixed output rate in each period. When demand is higher than that fixed rate, inventory (finished goods) is used to cover the shortfall. When demand is lower, overproduction creates inventory that can be drawn down later. Keeping the production rate steady reduces capacity swings, changeovers, and bottlenecks, while inventory serves as the buffer to meet varying demand.

The other concepts don’t describe this approach. A term focused on balancing capacity or prioritizing workload isn’t about keeping a steady rate with inventory buffering, and line-haul costs pertain to transportation, not production planning. While “level schedule” conveys a similar idea, the formal production planning method name that matches this description is the level production method.