A firm uses the chase strategy of aggregate planning.It produced 1000 units in the last period.Demand in the next period is estimated at 800,and demand over the next six periods (its aggregate planning horizon)is estimated to average 900 units.Which of the following tactics would be most representative of following a chase strategy?
A)add 100 units to inventory in the next period
B)add 200 units to inventory in the next period
C)hire workers to match the 100-unit difference
D)lay off workers to match the 200-unit difference
E)implement a lower price point to increase demand

Question

Quizplus · Accepted Answer

In a chase strategy, production is adjusted to match demand. Since demand is lower than previous production, laying off workers to reduce production by 200 units aligns production with the 800-unit demand.

A Firm Uses the Chase Strategy of Aggregate Planning