Capacity allocation strategies in a hypothetical job-shop

In today’s manufacturing environment, many companies are stressing due date performance and inventory levels as primary measures of shop performance. This is contrary to the traditional performance measure of resource efficiency. In response to this changing emphasis, and partly due to the success of many Japanese companies that emphasize inventory reduction and due date performance, companies may seek to add capacity cushions in an attempt to become more responsive to customer demands. In this paper, several strategies are studied to determine how best to allocate the additional capacity. Results suggest that the choice of allocation strategy is dependent on the level of fluctuations in the manufacturing process.