When production meets the demand and volume of a product from one cycle to the next is known as the chase strategy. This strategy is mainly used when demand is not predictable and there is not any inventory. In most cases using this strategy can result in a higher employee turnover rate which often leads to apprehensive and displeased employees. A top advantage of using the strategy is that inventory is permitted at its lowest level which can result in a savings for most companies. There are numerous companies that favor the use of a combination of both the chase and the level strategy. The mixture enables effectiveness of goals and lowers the cost more so than using each strategy alone.
The chase strategy is a common practice used in careers fields that can easily train new employees to begin work quickly. This strategy can be used in the restaurant and auto industry. In the restaurant industry the meals are made when ordered to match the production with the demand. Employees are hourly and easily trained; also the restaurants can adjust the employees work schedules to meet customer demand. In the auto industry the turnover rate for employees in usually high because of the nature of the business. The automobiles can cost companies money if not purchased; taxes are incurred the longer it sits on the lot. Employees in this industry are normally hourly as well and can been trained up quickly too.
Multiple challenges are associated with the chase strategy when it is used in production planning. Because chase strategy matches the production rate with the order rate by laying off and hiring employees as the order rate increases and decreases the success depends on being able to source employees that are easily trainable. The employees not only have to be easily trainable, but the jobs would also have to be simple enough to be able to train the employees fast. If they were not simple enough processes it could cause...