Adding a Complementary Product to What Is Currently Being Produced

question 18

Multiple Choice

Adding a complementary product to what is currently being produced is a demand management strategy used when

• A) demand exceeds capacity
• B) capacity exceeds demand for a product which has stable demand
• C) the existing product has seasonal or cyclical demand
• D) price increases have failed to bring about demand management
• E) efficiency exceeds 100 percent

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Definitions:

Lot-For-Lot

An inventory replenishment strategy where the order quantity matches exactly the demand for the next period, aiming to minimize holding costs.

Gross Requirements

The total amount of materials or products needed to meet the production schedule without accounting for any inventories on hand.

Lead Time

The amount of time that elapses between the initiation and completion of a process or project.

Time-Phased Product Structure

A detailed breakdown that shows the timeline on which components must be assembled or produced to complete a final product.