Which statement about Level production strategy is accurate?

• A. It adjusts capacity by hiring and laying off workers.
• B. It uses a constant output rate with fluctuating inventory to meet demand.
• C. It uses overtime and subcontracting to handle demand.
• D. It relies on make-to-order only.

Answer: (B)

Level production keeps the output rate constant over the planning horizon, aiming for stable capacity use and workforce. When demand changes from period to period, the system absorbs that fluctuation by varying inventory levels instead of changing production pace. If demand is lower than the constant production, inventory builds up; if demand exceeds the constant output, inventory is drawn down to meet it. This is why the statement about level production is accurate. The other options describe strategies that adjust capacity directly (hiring/laying off), use overtime or subcontracting (still changing capacity), or rely on make-to-order only (not a level, inventory-absorbing approach).