Fill in the Blank QuestionFill in the blank question.Production planning is important because producing too much can lead to (excess, insufficient) inventory.
Question
Fill in the Blank Question
Production planning is important because producing too much can lead to (excess, insufficient) inventory.
Solution
The correct word to fill in the blank is "excess."
Explanation
Production planning is a critical aspect of operations management in any manufacturing or service-oriented business. An effective production plan helps organizations determine the right amount of products to produce to meet customer demand without overproducing or underproducing. When a company produces too much, it results in excess inventory, which can incur additional costs such as storage, insurance, and potential markdowns if the products become obsolete or unsellable. Conversely, insufficient inventory can lead to stockouts, which may cause missed sales opportunities and dissatisfied customers. Thus, careful production planning is essential to balance supply and demand effectively.
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The traditional approach to inventory management to ensure sufficient quantity on hand to maintain production is known as:
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