A company has adequate average available capacity but does not maintain surge capacity.

When a company has adequate average available capacity but lacks surge capacity, increasing order-fulfillment lead times can provide the most capacity relief. By extending lead times, the company can spread out orders over a longer period, allowing for better resource allocation and reducing the pressure on production and distribution during peak times. This approach helps manage the flow of orders more effectively without requiring additional capacity or resources. Implementing allocation, increasing prices, or increasing product queue times may have some effects, but they do not directly address the issue of balancing capacity and demand as effectively as adjusting lead times.

References:

Stevenson, W. J. (2018). Operations Management. McGraw-Hill Education.

Heizer, J., Render, B., & Munson, C. (2017). Operations Management: Sustainability and Supply Chain Management. Pearson.