The Chase Strategy

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The Chase Strategy
The chase strategy is whereby a company only avails capacity that matches the existing demand in goods and services. The crux of the strategy is in ensuring that production does not exceed demand for goods and services. The strategy intends to maintain a steady inventory of goods even with the fluctuating workforce. Companies commonly interfere with the workforce engagements resulting in fluctuations. They may take the form of allowing employees to work beyond the normal hours or to work for less hours than usual. It may also involve terminating existing staff and recruiting others to fill positions during peak production or service seasons (Mahadevan, 2009). This strategy is common in the health, hospitality and automobile industries. General Motors is one company that might use this strategy particularly after the recession where there is a global drop in demand for vehicles because of intentional decrease in spending. Other factors that influence the company to maintain low inventory of its automobiles is the fact that automobiles have faster depreciation, there is a high cost of storage or warehousing, and because of the insurance and taxes expenses involved in operations.
One of the challenges of using the chase st...