Chase capacity is an approach that involves altering production or service capacity to align with the changing demand patterns. This strategy aims to match the resources available with the fluctuating demand over time, rather than maintaining a fixed capacity level.
Key Facts
- Definition: Chase capacity is the approach of altering production or service capacity to align with the changing demand patterns.
- Balancing Resources: Chase capacity requires balancing various resources such as staff availability, equipment levels, and other necessary resources to meet the demand.
- Risk and Control: Implementing a chase capacity strategy can be risky due to the potential challenges of resource availability when needed, the cost of readying resources, and the loss of control over capacity adjustments.
- Demand Management: Chase capacity is one of the three methods for reconciling capacity and demand, alongside level capacity and demand management. Demand management adjusts demand to meet available capacity, while chase capacity adjusts capacity to match the demand over time.
Balancing Resources
Implementing a chase capacity strategy requires careful balancing of various resources to meet the demand effectively. These resources may include staff availability, equipment levels, and other necessary inputs. The goal is to adjust the capacity in a way that minimizes the gap between supply and demand.
Risk and Control
While chase capacity offers the potential for improved efficiency and cost savings, it also carries certain risks. The primary risk lies in the challenges associated with resource availability when needed. Readying resources, such as hiring and training staff or acquiring equipment, can be time-consuming and costly. Additionally, there is a risk of losing control over capacity adjustments, as the strategy requires frequent changes to match demand fluctuations.
Comparison with Other Capacity Strategies
Chase capacity is one of the three primary methods for reconciling capacity and demand, alongside level capacity and demand management. Level capacity involves maintaining a fixed capacity level throughout a period, regardless of demand variations. Demand management, on the other hand, focuses on adjusting demand to meet the available capacity through strategies such as pricing, marketing, and operational modifications.
Conclusion
Chase capacity is a dynamic approach to capacity planning that aims to align production or service capacity with the changing demand patterns. While it offers the potential for improved efficiency and cost savings, it requires careful balancing of resources and carries certain risks. Organizations should carefully consider the advantages and disadvantages of chase capacity in the context of their specific circumstances and objectives.
References
- Draiver Help Center. (n.d.). Explain Chase and What Capacity Means. Retrieved from https://getanswers.draiver.com/knowledge/explain-chase-and-what-capacity-means
- OpenLearn. (n.d.). Capacity and Demand Management: 9 Level and Chase Capacity Strategies. Retrieved from https://www.open.edu/openlearn/society-politics-law/criminology/capacity-and-demand-management/content-section-9
- The Business Professor. (2022, April 10). Capacity Management – Explained. Retrieved from https://thebusinessprofessor.com/mgmt-operations/aggregate-capacity-management-definiti
FAQs
What is chase capacity?
Chase capacity is an approach that involves adjusting production or service capacity to align with changing demand patterns.
What are the benefits of chase capacity?
Chase capacity can improve efficiency and reduce costs by matching resources with demand fluctuations.
What are the risks of chase capacity?
Chase capacity can be risky due to challenges in resource availability, the cost of readying resources, and the potential loss of control over capacity adjustments.
How does chase capacity differ from level capacity?
Chase capacity involves adjusting capacity to match demand, while level capacity maintains a fixed capacity level regardless of demand variations.
What are some examples of chase capacity in practice?
Examples of chase capacity include adjusting staffing levels in a call center based on call volume, or increasing production output in a factory during peak demand periods.
What are the key considerations for implementing a chase capacity strategy?
Key considerations include the availability and flexibility of resources, the cost of adjusting capacity, and the accuracy of demand forecasts.
How can organizations mitigate the risks associated with chase capacity?
Organizations can mitigate risks by carefully planning and coordinating capacity adjustments, having contingency plans in place, and investing in flexible resources.
When is chase capacity most appropriate?
Chase capacity is most appropriate when demand is highly variable and predictable, and when the cost of adjusting capacity is relatively low.