iCore Operations Practice Exam

The chase plan is characterized by its approach to aligning production and manpower levels with fluctuations in demand. This method involves adjusting the production rate and workforce size to match varying customer demands closely. When demand increases, the production and number of workers are ramped up accordingly; conversely, when demand decreases, production rates are lowered, and staff levels can be reduced. This ensures that the company is not overproducing or underutilizing resources, thereby optimizing costs and maintaining inventory levels efficiently.

In contrast, the level plan maintains a steady rate of production and workforce, regardless of demand fluctuations, which can lead to excess inventory or shortages. The stable workforce plan aims to retain a consistent number of employees while managing variations through overtime or temporary workers, which makes it less flexible than the chase plan for rapid changes in demand. The fixed plan generally suggests a static level of production and resources, which does not allow for adjustments based on market conditions.

Therefore, the chase plan stands out for its effectiveness in responding dynamically to changes in demand through production and manpower adjustments.