Which of the following would motivate companies to choose Chase strategy for aggregate planning. Group of answer choices (1). skilled labor shortage (2). Inventory issues (3). Capacity constraints (4). Morale concerns

The correct answer is letter (2) : Inventory issues.

Explanation:

Aggregate planning involves analyzing and establishing all the operations of a company to meet the projected schedule demand. Two are the approaches that can be used to achieve that goal: the level strategy and the chase strategy.

The chase strategy matches the company's production capacity with its demand period by period. This strategy is mostly used in just-in-time production manufacturers where inventory is practically never stored.

Thus, if there are inventory issues, a company is more than likely to use the chase strategy in aggregate planning.

(2). Inventory issues

Explanation:

Chase strategy for aggregate planning are usually used by organization as a way of reducing cost and managing inventory related issues. Inventory issues can be managed internally by increasing stock during periods of slack demand and same can be used to service stock during periods of high demands.

Organizational cost is effectively managed, as workers contribute productively at all periods to the bottom line.