A company has adequate average available capacity but does not maintain surge capacity. With a distribution route to manage, which of the following actions will provide the most capacity relief?
A company has adequate average available capacity but does not maintain surge capacity. With a distribution route to manage, which of the following actions will provide the most capacity relief?
Implementing allocation will provide the most capacity relief. Allocation allows the company to prioritize and distribute available resources more effectively, ensuring that high-priority orders are fulfilled first and reducing the risk of bottlenecks. This approach directly manages the distribution route by optimizing the use of existing capacity without immediately increasing demand, which could lead to more significant issues in the absence of surge capacity.
Can someone explain me why?
Increasing order-fulfillment lead times is the better option for providing capacity relief in this scenario. By extending lead times, the company can better manage its available capacity by spreading out the workload over a longer period. This will help to balance the load and avoid capacity shortages, especially if there is no surge capacity available.