Discuss the advantage and disadvantage of level production schedules in firms with cyclical sales.

Cyclical industry mean the industry which sensitive to the business cycle. It means the revenues are higher during the economic properity and expansion period and lower during the economic downturn and contraction.

Advantage of the level of production

The level of production in a cyclical industry allows the organization the maintenance of a stable workforce and reduces the inefficiencies caused due to shutting down of the unit during the crash production period.

The disadvantage of the level of production

Under the level of production in a cyclical industry, a company is required to maintain a large stock of inventory during the low-sale period. This inventory may be expensive and require more funds with a risk of inventory obsolescence.