Ehmke Manufacturing uses the pure chase strategy of aggregat

Ehmke Manufacturing 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. Which of the following tactics would be most representative of following a chase strategy?

Solution

Chase strategy emphasizes to produce only the amount of goods that is ordered by the customers. For example, a food joint prepares meal only when it is ordered.

In the given scenario, existing manpower is used in producing 1000 units (last period) but demand for the next period is only 800 units.

Thus, Ehmke will retrench or offload manpower to cover the difference between 1000 units and 800 units. It is 200 units.