1. If a make-to-stock manufacturing firm with highly seasonal demand follows a level production strategy, which of the following is likely to be true?

The firm must make sure that its maximum capacity is at least as high as the heaviest demand period.

Inventory will fluctuate significantly during the year.

It will be difficult to keep the workforce size stable.

The production rate must be set equal to the demand in the heaviest demand period, and stay at that level all year.