The production planner
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The production planner of Omega Optical, a manufacturer of industrial lenses, developed the following production plan for the next 4 periods.
Period 1 Period 2 Period 3 Period 4
Demand Forecast 40000 70000 30000 55000
Beginning Inventory 9000
Planned Production 48000 48000 48000 48000
Ending Inventory
a. Is the production planner following a chase demand or a level capacity strategy?
b. Compute the projected beginning and ending inventory for each period. Possible backorders may be shown by a negative inventory.
I believe this is a chase demand not completely sure. Please explain.
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Solution Summary
The solution assists with computing the projected beginning and ending inventory for each period. Possible backorders may be shown by a negative inventory.
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Here are your answers.
a. The production planner is following a level capacity strategy. The definition for a "chase demand" strategy is when the manager adjusts the planned production to accommodate for demand fluctuations. In this case, however, as we can see from the table you ...
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