Chase demand and level capacity are the two types of strategies that can be implemented to achieve a balance of demand and capacity in aggregate planning. Under the chase strategy, production is varied as demand varies, matching the level of demand. A period’s planned quantity of output is equal to that period’s expected demand. The level capacity strategy is intended to supply the demand by setting up a uniform capacity level for a particular period. This strategy does not consider any fluctuations in the level of demand. Overall, under the chase strategy, production is varied as demand varies, and with the level strategy, production remains at a constant level in spite of demand variations.
Master Production Schedule (MPS) is the result of the disaggregation of the aggregate plan, which shows the quantity and timing of specific end items for a scheduled horizon. The inputs of master scheduling are the beginning inventory, forecast, and customer orders. The outputs include the projected inventory of finished goods, master production schedule, and uncommitted inventory (Stevenson, 2014). A master schedule indicates the quality and delivery times for a product but does not show planned production.
A key component of effective scheduling is the use of time fences that are points in time that separate phases of a master schedule planning horizon. Time fences divide a scheduling time horizon into three sections, referred to as frozen, slushy, and liquid dependent on the firmness of the schedule (Stevenson, 2014). Frozen time fences are firm or fixed phases that can be subject only to emergency changes. In the slushy phase, capacity and materials are committed to less extent. In the liquid zone, any changes can be made to the MPS as long as they are within the limits set by the production plan.
References
Stevenson, W. (2014). Operations management (12th ed.). McGraw-Hill Education.