Does your company make goods only after receiving an order? Do they make goods before and then stock them? These two questions can help clarify how your organization plans and schedules the production or execution of goods and services. There are many different methods that companies may use, some examples are: Make to stock, Make to order and Assemble to order. Whichever strategy a company selects will have a varying degree on the amount of inventory a company holds, how they will produce and how resources are spread through the organization. The biggest impact is the amount of inventory the company carries which as you may know already is cash availability.
The chase strategy is one method organizations use to maintain a level inventory while producing at varying rates in order to support demand. The chase strategy is sometimes referred to as demand matching because the strategy varies production to meet demand.
The main benefits associated with a chase strategy are:
When you go to a restaurant for food and place an order the staff will normally pull supplies from a "stable inventory" level and make the order, or in other words "chase the demand."
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