Answer (A) is correct . A production plan depends on the sales budget and anticipated inventory levels. Inventory serves to balance seasonal fluctuations in sales with the need for stable and efficient use of productive resources.
Answer (B) is incorrect because EOQs and reorder points are considered only after it has decided how many units are needed.
Answer (C) is incorrect because Exponential smoothing is a technique used to level or smooth variations encountered in a forecast. A production plan should be based on the variations expected.
Answer (D) is incorrect because Regression analysis explains the correlation of a dependent variable with one or more independent variables. It is based on linearity of costs.
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