Learning Team Reflection: Chase Strategy
University of Phoenix
OPS/571
March 7, 2014
Learning Team Reflection: Chase Strategy
When it comes to production planning and scheduling, the strategy a company decides to implement is based on many factors. The outcome of what strategy a company decides to use can be directly related to the amount of inventory they have on hand, the size of their work force, and the cash they have free. The Chase strategy is one capacity planning approach that can be used.
The Chase Strategy, “matches the production rate to the order rate by hiring and laying off employees as the order rates varies” (Jacobs & Chase, 2011 P. 534). Under the Chase Strategy, when demand varies so does production. The positive side to this strategy is that costs are lower because workers are not being compensated when work is not needed. Also, there is not an excessive amount of inventory on hand that needs to be stored. Because of this cost savings companies will have cash free to spend on other expenditures. A downfall to the Chase Strategy is that workers may be less motivated to work at a diligent pace, out of fear of being laid off.
Most retail companies use a form of the Chase Strategy in the service industry. In the retail market, the strategy can be seen in full force during holidays, such as Christmas. Many employees are hired knowing they are temporary seasonal help, and are then laid off when the work was no longer needed. Another industry to use the chase strategy is seasonal agriculture. Employees are employed only when there is inventory to move and sales to support the employees. The employees are then not compensated during the off season. Many times the employees are laid off or hired on as seasonal help only. Small businesses use the chase strategy when additional help is needed during peak seasons or special promotions. The strategy can often be seen with wedding photographers who need an assistant during a...