Final answer:
It is true that a master schedule should cover the cumulative lead time required to produce the end items, considering the time needed for all production stages. This planning reflects the flexibility producers have in expanding production over the long term compared to the short run.
Step-by-step explanation:
The statement that the master schedule needs to be for a period long enough to cover the stacked or cumulative lead time necessary to produce the end items is true. In business, particularly in production and operations management, it’s essential to understand the distinction between short run and long run production. The master schedule is a detailed plan that outlines when and how much of each product will be produced. It should account for the cumulative lead time, which is the total time required to manufacture and deliver a product after the receipt of a customer's order. This includes the time taken for procurement of materials, manufacturing of components, assembly, and delivery.
On the supply side of markets, producers typically have more flexibility to expand production in the long term. Building new facilities, hiring workers, or opening new stores are more viable over several years compared to the short run of a few months. This indicates that a longer-term view is beneficial when planning production schedules to accommodate for expected market demand and to enable strategic expansion.