The Chase Production Strategy relies on a constant output rate and capacity while varying inventory and backlog levels to handle the fluctuating demand pattern. True or False?

The Chase Production Strategy relies on a constant output rate and capacity while varying inventory and backlog levels to handle the fluctuating demand pattern. True or False?

• A. False
• B. True
• C. It uses variable output with fixed inventory
• D. It ignores backlog levels

Answer: (A)

The Chase Production Strategy works by adjusting the production rate to match demand in each period, using capacity and workforce changes to stay in step with fluctuations. The goal is to keep inventory levels low and avoid building up stock, rather than keeping output fixed and letting inventory or backlogs absorb the swings. So the statement is false because it describes keeping output constant and varying inventory and backlog, which is the opposite of chasing demand. In contrast, level production would maintain a steady output and use inventory to smooth demand; the Chase approach instead varies output to meet demand as it occurs, with backlogs being a potential consequence if capacity cannot keep up.

The Chase Production Strategy works by adjusting the production rate to match demand in each period, using capacity and workforce changes to stay in step with fluctuations. The goal is to keep inventory levels low and avoid building up stock, rather than keeping output fixed and letting inventory or backlogs absorb the swings.

So the statement is false because it describes keeping output constant and varying inventory and backlog, which is the opposite of chasing demand. In contrast, level production would maintain a steady output and use inventory to smooth demand; the Chase approach instead varies output to meet demand as it occurs, with backlogs being a potential consequence if capacity cannot keep up.