In: Operations Management
This question is about Chapter 13 Aggregate Planning. We talked about two types of options for aggregate planning strategies. What are the two types of options, and what do they each include?
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Here we will get into the topic of two types of options for aggregate planning strategy along with what are these options and what do they each include.
Before we get into the options of aggregate planning strategy, we need to know about the aggregate planning strategy.
Aggregate planning strategy can be described as, a strategy that includes the overall information which would be used to analyze and keep a balance between all the operations of the organization in such a way that the strategy can be used in the reduction of the cost of the production in an organization. Aggregate planning strategy maintains a balance between all the operations to reduce the cost for further benefits of the organization.
The two options which are available for the aggregate planning strategy are a level strategy and chase strategy.
A level strategy can be described as, a strategy whose main motive is to satisfy the customer with the way of maintaining the balance of employment and production in the organization. This mainly includes the methods of reduction of cost in the organization. The balance between employment and production will ultimately lead to the satisfaction of the demands of the customer along with the reduction of cost.
The chase strategies play a very important and significant role and it is very important for the organization to implement it. The chase strategy means, to make a balance between the demand of the customers and products in the unit. This strategy focuses on maintaining balance by the way of motivating the employees, or the method of a layoff when in case of less production, and hiring more employees when in case of production. This mainly includes the method of hiring and layoff, or motivating the employees towards the organizational goal of satisfying the demands of customers by making a balance between the demands and production.