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Supply Chain Management

Category - Inventory

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Which of the following results in inventory build-ups in low-demand periods?

Level strategy.
Chase strategy.
Hybrid strategy.
None of these.

Explanation

Answer: A - In a level strategy, a stable machine capacity and work force are maintained with a constant output rate. Here production is not synchronized with demand and inventories are either built up in anticipation of future demand or backlogs are carried over from high to low demand periods.

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