The second of the two pure planning strategies available to the aggregate planner is the chase strategy. The chase strategy or otherwise known as the demand matching strategy and involves a firm producing just enough goods just to meet demand for a particular period.
The chase strategy has several associated advantage and disadvantage applicable to it. One of the main associated disadvantages is the high amount of hiring, firing or retrenching of employees. As a result of this high labour volatility we find that a high percentage of the work force feels insecure and are unhappy within their job. This volatility is also a major contributor to Structural unemployment within the economy. This The South African labours law such as the Basic Conditions of Employment Act make is extremely difficult and expensive for firms to use the chase strategy. Firms using the chase strategy can expect high employment costs, as they constantly have to advertise, interview and train new workers, as well as factor in severance pay and increases in unemployment insurance costs are those leaving the firm.
On The other side the chase strategy has some advantages that a firm might find attractive one of these major advantages is that the chase strategy allows inventory to be held to the lowest level possible, and for some firms this is a considerable savings.
Chase Strategy
The second of the two pure planning strategies available to the aggregate planner is the chase strategy. The chase strategy or otherwise known as the demand matching strategy and involves a firm producing just enough goods just to meet demand for a particular period.
The chase strategy has several associated advantage and disadvantage applicable to it. One of the main associated disadvantages is the high amount of hiring, firing or retrenching of employees. As a result of this high labour volatility we find that a high percentage of the work force feels insecure and are unhappy within their job. This...