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If a service firm were to attempt a pure level strategy for aggregate planning, should its...

If a service firm were to attempt a pure level strategy for aggregate planning, should its level of output be at average demand, peak demand, or minimum demand?

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Answer #1

Aggregate planning refers to the process where the plans are made about the output levels of the product to be maintained over the coming period of time, maybe annually, half yearly or monthly.

The pure level strategy involves making an aggregate plan to maintain the stable production rate throughout. The firm if in case following the level strategy tend to maintain a stable/ steady rate of output when the demand is minimum.

This decision will help the firm in keeping the inventory levels high, than are currently needed. And also make the company well verse to manage the situations of unexpected increased demand for the products.

Hence, it is clear from the above discussion that the level of output of the firm if following pure level strategy be at minimum demand.

The answer is Minimum Demand.

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