Which one of the following capacity alternatives would typically be best to implement a chase strategy for a manufacturing firm?
A) Use creative pricing to modify demand.
B) Build anticipation inventory to absorb the variability in demand.
C) Increase overtime to satisfy peaks in demand.
D) Use promotional campaigns to boost demand.

Question

Quizplus · Accepted Answer

A chase strategy involves adjusting the production capacity to match the demand. Therefore, the best capacity alternative for implementing a chase strategy would be to increase overtime to satisfy peaks in demand. This allows the firm to produce enough to meet the demand without incurring high inventory costs. Options A, B, and D may help to adjust demand, but they would not be considered a capacity alternative.

Which One of the Following Capacity Alternatives Would Typically Be