Question 1
Which of the following is consistent with a pure chase strategy?
◦ vary production levels to meet demand requirements
◦ little or no use of inventory to meet demand requirements
◦ vary production levels and work force to meet demand requirements
◦ vary work force to meet demand requirements
◦ All of the above are consistent with a pure chase strategy.
Question 2
A firm uses the pure 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. In following the chase strategy, the firm will
◦ implement a lower price point to increase demand.
◦ lay off workers to match the 200 unit difference.
◦ add 200 units to inventory in the next period.
◦ hire workers to match the 100 unit difference.
◦ add 100 units to inventory in the next period.
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