What is the difference between level strategy and chase strategy? How is each calculated using an...

Question

Question

What is the difference between level strategy and chase strategy? How is each calculated using an example.

Answer 1

Answer #1

Level strategy is an aggregate planning strategy in which the production remains at a constant level ,irrespective of the demand.

i.e production does not vary as the demand varies over time.

Chase strategy is an aggregate planning strategy in which the production varies as the demand varies.

i.e production varies as the demand varies over time.

Let us take an example :

Suppose the demand for the four quarters are as shown in the figure.

In level strategy ,production =Average of the demand values =350

In chase strategy, the production for a specific quarter is fixed to match the demand for that quarter as shown above.

Production for quarter 3=Demand for quarter 3=400

Answer 2

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