What Is Chase Strategy?

Production Planning in a Chemical Factory

The chase strategy has production varied as demand varies. The level strategy keeps production constant despite demand variations. A level strategy means that a company will produce at a constant rate regardless of demand.

The ability to change output level is a requirement for a chase strategy. In industries where labor is the major determinant of capacity, it may be possible to make changes. Production planning is the planning of production in a company.

It uses the resources of employees, materials and production capacity to serve different customers. A production worker is responsible for operating equipment in the factory. The production worker needs to help in the packaging and shipment of items, and ensure all machinery runs smoothly.

The Pursuit Strategy: Matching Demands with Final Inventory

Sometimes organizations are not able to meet consumer demands because of limited supply. You might have miscalculated capacity that affected your supply. It means that planning is concerned with the amount of time that is available.

Aggregate planning methods aim to match demand supply by taking care of challenges and setbacks. The pure chase strategy is to match demands with final inventory. It absorbs demand fluctuations for successful aggregate planning.

The workforce level or output rate can be maintained. Organizations respond to changes in demand with their resources. It is not certain whether they focus on inventory or workforce.

Aggregate Planning with Mixed-Integer Programming

There are two planning strategies that the aggregate planner can use. Firms can either use one of the pure strategies in isolation or combine the two. A backorder or a backlog is a second alternative.

When capacity begins to catch up with diminishing demand, a backorder is a promise to deliver the product at a later date. The backorder is a device that can be used to move demand from one period to another, if demand is lower. Linear programming is an method of programming that uses constraints and the availability of limited resources to find a maximum profit or revenue.

The Transportation Model is a type of linear programming that can be used to get aggregate plans that allow balanced capacity and demand minimize costs. Most real-world aggregate planning decisions are not compatible with linear programming. An excellent example of linear programming in aggregate planning can be found in Supply Chain Management: Strategy, Planning and Operation.

Mixed-integer programming can be useful for aggregate plans that are prepared on a product family basis. The number of units to be produced in each product family can be determined using mixed-integer programming. The search decision rule can overcome some of the limitations of the linear cost assumptions.

The user can state cost data inputs in very general terms. It requires a computer program to evaluate the cost of a production plan. It searches for alternative plans that have the minimum cost.