BUS 633 University of Arizona Week 6 Chase Strategy Discussion

Description

Prior to beginning work on this discussion forum, read sections 13.1–13.3 in Chapter 13 of the required textbook, Operations and Supply Chain Management.

Chase strategy refers to the concept that you are chasing the demand set by the market. Production is set to match demand and does not carry any leftover products. 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.

The chase strategy is used in the industries that must contend with perishables or with a company that does not have a lot of extra cash on hand to handle the added risks of unsold products. The production schedule is based on orders and immediate demand.

By varying production or services to meet demand, the lean approach of inventory management has lower inventory levels and reduced labor costs.

For example, an airline call center has varying demand—higher calls during summer months and major holidays. Inaccurate forecasts can cause havoc concerning staff capacity and scheduling decisions. In some situations, equipment capacity may not be adequate during periods of peak demand.

For this discussion, decide to be for or against adopting a chase strategy for a major airline call center. Provide a research-based rationale for your decision.

References

Collier, D. A, & Evans, J. R. (2019). Operations and supply chain management. Cengage Learning.

Chapter 12: Supply Chain Management and Logistics
Sections 12.1–12.3, 12.5
Chapter 13: Resource Management
Sections 13.1–13.3
Chapter 17: Lean Operating Systems
Sections 17.0–17.3

Fitzsimmons, J., Fitzsimmons, M. (2011). Service management: operations, strategy, information technology (seventh edition). McGraw-Hill Irwin; New York.

Leong, G., Wisner, J., Tan, K. (2012). Principles of supply chain management: a balanced approach (third edition). South-Western; Mason, OH.

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