The three basic production strategies for addressing the aggregate planning problem are the chase production strategy, the level production strategy, and the mixed production strategy. True or False?

The three basic production strategies for addressing the aggregate planning problem are the chase production strategy, the level production strategy, and the mixed production strategy. True or False?

• A. False
• B. True
• C. It is just chase and level
• D. It is only level and mixed

Answer: (B)

Understanding aggregate planning involves looking at how to balance demand with production over time using different strategies. The three basic production strategies used to address this problem are chase production, level production, and mixed production. The chase approach tunes production (and often the workforce) to exactly match demand in each period, which minimizes inventory but can incur higher costs from hiring, firing, or overtime. The level approach keeps production constant across periods, using inventory or backorders to absorb any demand fluctuations, which smooths capacity but can raise holding or backorder costs. The mixed strategy combines elements of both, adjusting production in some periods while relying on inventory to smooth others to balance the trade-offs between changing production levels and holding inventory. Since these three options are commonly recognized as the core ways to handle aggregate planning, the statement is true.