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In using the "chase strategy" variations in demand could be met by:
a. varying output during regular time without changing employment level.
b. varying output during regular time by changing employment levels
c. (a) and (b)
d. varying inventory levels
e. price increases
Use the following to answer questions 2 and 3
A firm has 43 units of a certain product on hand. Forecasts for the first two planning periods are 20 units each. A production quantity of 80 units is planned to be available in period 3. Customer orders are 22 for period 1 and 17 for period 2.
What is the projected on-hand inventory at the end of period 2?
a. 21
b. 1
c.12
d. 20
e. impossible to say without more information
What quantity is available for commitment to new customers in either of the first two periods?
b.1
c. 20
d. 4
Ordering larger quantity would increase safety stock. Ordering more frequently would reduce safety stock and increase the chance of stock outs.
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