Operations Management: Aggregate Planning - Chase Strategy

[@manavibes171]

Some critical feedback would be to really talk slower and try to break this down further. I think your audience will grow more that way. There should not be questions on the comments if it were addressed on the video. Otherwise, I do appreciate you making these videos, and I can see it going far! thanks.

[@The_Business_Doctor]

Thank you for you feedback, Mana.

[@blipbytes]

Thank you for this . Keep going sir. Subbed!

[@The_Business_Doctor]

You're very welcome! I'm glad you found it useful.

[@jovenerikacalubad7074]

thanks a lot sir but may I know how you compute the production?

[@The_Business_Doctor]

Hi Joven,
At 2:00, I mention that the current month's production is the previous month's demand. That is also stated in the data for the problem where the chase strategy process the quantity demanded in the prior month.
Hope this helps.
Mark

[@Mady-xu4bj]

Is the layoffs and hiring of employees the same idea as overtime and undertime costs?

[@The_Business_Doctor]

Hi there. No they are not the same. Overtime is the extra pay to employees over and above normal work hours and is used to produce more to keep up with demand. Hiring costs include recruitment and training to bring on new people. Layoff costs include severance. Undertime could be productivity loss from not being fully utilized. Usually a problem will have either overtime/undertime or hiring/layoff costs but not all at the same time

[@engineeringlecturesandexpe3091]

Amazing very Helpful

[@The_Business_Doctor]

I’m glad you liked it!

[@engineeringlecturesandexpe3091]

Very helpful Mam

[@The_Business_Doctor]

I’m glad you found it helpful.

[@HuSsAiNNiAsSuH1]

I am kind of confused, in the chase strategy, the production should meet the demand of each month not the month after ?! is that right ?

[@The_Business_Doctor]

Hi Hussain,
The problem specifically states that each month's production is based on the PREVIOUS month's demand. This is the common application of the chase strategy where the firm "chases" the demand by producing what actual demand last month was.
Hope this helps.
Mark

[@AceKay_SK]

Hello, for February..why do we have to hire workers yet we have enough in the inventory to meet customer demands? if we hire 200 in Feb it means we are going to have a starting inventory of 400 in march and an ending inventory of 200. Isnt that so?

[@The_Business_Doctor]

Chase strategy "chases" demand from a previous period and can result in over production. Sometimes we want to do that to build up inventory to be ready for a very busy time when production will not be sufficient to meet demand and to avoid shortage.

[@AceKay_SK]

@@The_Business_Doctor ok thank you

[@lailaabduljawad3025]

Thanks a lot sir please how did you get the stock out? What is the formula ?

[@The_Business_Doctor]

When the calculation in the third column becomes negative, that is a stockout - that means the demand exceeds the beginning inventory plus the current period production.

[@bahaaalsaqqa1350]

Hello, what if the period production was in days ex: for Jan 21 working days how to calculate it? and thank you

[@The_Business_Doctor]

Hi Bahaa, for simplicity we consider production on a monthly basis and would then manage daily production. by dividing the monthly production over the number of working days. So January production of 1,600 units would be met by producing about 17 units per day.
Hope this helps.
Mark

[@ohhrelingo6271]

Please could you tell me how did you get the third column?

[@The_Business_Doctor]

Hi there, Ohhrelingo...do you mean the blue Production (Prev Month) column? If so, that is the demand from the previous month. So for January, even though demand is 1,400 units, demand in December was 1,600 units so that is what was produced in January. January's demand will be produced in February, and so on.
Hope this helps.
Mark

[@ohhrelingo6271]

@@The_Business_Doctor Thanks a lot dear I got it , sorry sir may I have another question what is the formula that I can use it to calculate the stock for each month? I was trying to understand it but I couldn't!!!

[@The_Business_Doctor]

@@ohhrelingo6271 That would be the beginning inventory (which is the ending inventory from the previous month) plus production in the current month less demand in the current month.

[@ohhrelingo6271]

@@The_Business_Doctor thanks a lot

[@The_Business_Doctor]

@@ohhrelingo6271 You're very welcome!

[@aiqadhamirah6548]

Hello sir. How to calculate the production for the previous month?

[@The_Business_Doctor]

Hello Aiqa. This example demonstrates a chase strategy where each month's production is based on the previous month's demand. So the previous month would come from the month before that. If you're talking about the starting production for January, that would be the 1,600 units in December which is identified in the problem data.
Hope this helps.
Mark

[@helapenio667]

Where did the stockout from june go?

[@The_Business_Doctor]

There is no stockout in June since the demand and production are equal. Hope this helps.

[@mostafaaboelyazeed1788]

How can I perform Chase when I am asked to give certain opening and ending numbers of inventory

[@The_Business_Doctor]

Generally with chase the production for the current month is the last month’s production (or whatever else the chase strategy is to be based on). It doesn’t matter what your beginning inventory is because it’s the production quantity that is the chase quantity.

[@absolutezero8631]

why arent you calculating the production cost but calculated the production cost in your AP3 video?

[@The_Business_Doctor]

Hi there. This is because the problem does not provide a unit production cost, so you can't do it.
Hope this helps.
Mark

[@GGsupply]

thanks!

[@The_Business_Doctor]

You''re welcome!

[@pathsunscripted]

thanks.

[@The_Business_Doctor]

You’re welcome!