The Chase Strategy

In: Business and Management

Submitted By grodrigue49
Words 798
Pages 4
The Chase Strategy
OPS/ 571
Prof. Thomas Kenfield
Giselle Rodriguez
Kyle Welch

When evaluating a business performance, one of the main parts of the business that affects performance is the production process including its inventory and how the company manages inventory. Inventory is affected by the relationship of demand and production that the company follows which we can call the production strategy. There are several production strategies used worldwide by companies, and these have all different impact on inventory and the time it takes for a consumer to have the product on its hand.
In order for a company to understand what type of production and manufacturing method will work best for their firm, they need to use aggregate planning. “Aggregate planning is the process of developing, analyzing, and maintaining a preliminary, approximate schedule of the overall operations of an organization. The aggregate plan generally contains targeted sales forecasts, production levels, inventory levels, and customer backlogs” Inman. 2004.
Aggregate Planning focuses on creating a cost effective balance between capacity of production and demand trough Level strategy and Chase Strategy. For this paper we will focus on Chase Strategy.
Chase Strategy
This strategy aims to match demand and capacity by producing the amount of goods that are demanded or ordered by the customer. This strategy has both advantages and disadvantages which are:

Advantages * It allows inventory to be held to the lowest possible levels, resulting in savings on all inventory related cost like: storage cost, cost of capital, insurance, taxes, warehousing, depreciation, insurance, obsolescence and shrinkage. * The utilization of workers and resources is high because the amount of workers is the amount needed.
* Matching demand requires that the firm hires…...

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