The chase strategy refers to the notion that you are chasing the demand set by the market. This is a lean production strategy, saving on costs until the demand – the order – is placed. Inventory costs are low, and the cost of goods for products sold is kept to a minimum and for a shorter length of time.

A chase strategy implies matching demand and capacity period by period. This could result in a considerable amount of hiring, firing or laying off of employees; insecure and unhappy employees; increased inventory carrying costs; problems with labor unions; and erratic utilization of plant and equipment.

What are the eight costs generally considered in aggregate planning? The eight costs are – Regular time production cost, Overtime production cost, inventory cost, shortage or backorder cost, cost of hiring, cost of layoff, outsourcing cost and underutilization cost.

Under the chase strategy, production is varied as demand varies. With the level strategy, production remains at a constant level in spite of demand variations. The use of a level strategy means that a company will produce at a constant rate regardless of the demand level.

The use of a chase strategy requires that a company have the ability to readily change its output level, which means that it must be able to readily change its capacity. In some industries where labor is the major determinant of capacity, and where additional labor is readily available, such changes may be feasible.

a. calculate the total production required. (Total Production = total forecast + back orders + ending inventory – opening inventory), calculate the production required each period by dividing the total production by the number of periods, and calculate the ending inventory for each period.

Part 3 – Six steps to create an efficient production strategy

1. Step 1 – Set challenging long-term goals.
2. Step 2 – Identify an expert.
3. Step 3 – Identify where the potential is greatest.
4. Step 5 Develop the strategy.
5. Step 6 Visualize and confirm the development strategy.

Here are a few effective production planning strategies that you can immediately apply to your manufacturing plant.

1. Use the Right Forecasting Method.
2. Understand Your Production Capacity.
3. Implement Better Inventory Control.
4. Use an Automated Production Planning System.
5. Avoid Delays with Equipment & Machine Maintenance.

Production planning is the planning of production and manufacturing modules in a company or industry. It utilizes the resource allocation of activities of employees, materials and production capacity, in order to serve different customers.

There are other reasons that production management is important to business operations: Reduces Manufacturing Cost – By maximizing outputs while minimizing inputs, production management lowers the cost required to produce finished products.

The production department is responsible for converting raw materials and other inputs into finished goods or services.

A production worker is responsible for operating equipment in a factory and preparing items for distribution. The requirements for a production worker involve assembling and checking products, ensuring all machinery runs smoothly, and assisting in the packaging and shipment of items.

Production management’s responsibilities are summarized by the “five M’s”: men, machines, methods, materials, and money.

Money, material, machine and manpower are the Four Ms, the traditional framework for viewing the resources available to a business, which can be useful when designing a business plan.

“The proposed 4M approach takes into account all the most important aspects involved in the manual assembly: Method, Machine, Man and Material. The final goal is to provide a means for the concurrent improvement of the product design, the work-station ergonomics, and the assembly tasks.”

4Ms are the most important factors which affect the final outcome of any process involved. For a long time using the 4Ms approach, not only for root cause analysis (cause-and-effect) but also for several purposes, they change this method a bit and link it to the IPO (Input – Process – Output) model.

4Ms #2: Machine Refers to the devices and equipment used to perform specific type of work and usually uses energy (electricity) to perform a task.