Explain the basic strategies that an aggregate planner has available to balance the various costs and meet demand.
Expert Answer
The various strategies are:
Chase = In this, demand is matched with production for each period by changing the machine capacity or number of employees. Hence, it ensures no inventory or backlog. The additional cost is for overtime of workers, subcontracting etc.
Level = In this, machine capacity and manpower remains constant. Basis the aggregate or future demand, either there is excess production or backlog of orders which is met later on. The additional cost is of inventory holding, back orders