Certified Supply Chain Professional (CSCP) Practice Exam

What is a characteristic of a fixed high capacity strategy?

1. Adjusts capacity based on demand

2. Has the capacity to meet peak demand

3. Ignores fluctuations in demand

4. Focuses on minimizing idle time

The correct answer is: Has the capacity to meet peak demand

A fixed high capacity strategy is designed to maintain a level of production capacity that can meet peak demand consistently. This strategy is particularly useful in industries where demand can vary significantly, allowing businesses to ensure that they are always prepared to fulfill the highest levels of demand without delays. By having the capacity to meet peak demand, organizations can avoid lost sales opportunities that may arise if their production capabilities are insufficient during busy periods. This approach also helps in achieving economies of scale, as running production at a high capacity can lower the per-unit costs and potentially improve profitability. In contrast, adapting capacity based on demand would indicate a more flexible strategy rather than a fixed one. Ignoring fluctuations in demand could lead to overcapacity, resulting in higher costs if demand does not meet expectations. Focusing on minimizing idle time may be relevant in overall efficiency strategies but does not capture the essence of a fixed high capacity approach, which prominently features preparedness for maximum demand levels.