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?
The most effective action to provide capacity relief in this scenario is:
**B. Implementing allocation**
Allocation involves distributing available capacity or inventory among customers or orders in a fair and prioritized manner. This helps manage demand during periods of limited capacity, ensuring that critical orders are fulfilled while avoiding overburdening the system. It directly addresses the issue of capacity constraints without requiring significant operational changes.
The other options are less effective:
- **A. Increasing order-fulfillment lead times** may reduce immediate demand but does not address capacity management directly.
- **C. Increasing prices with a 30-day effective date** is a longer-term strategy and may not provide immediate relief.
- **D. Increasing product queue times** could lead to delays and customer dissatisfaction without solving the capacity issue.
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.
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