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CMA Intermediate · Operations Management and Strategic Management · Operations Planning

Which capacity strategy builds capacity ahead of anticipated demand, accepting some idle capacity in the early period?

The lead strategy adds capacity before demand materialises, accepting temporary idle capacity to avoid stockouts and capture market share. A lag strategy waits until demand is proven, while a match strategy adds capacity in small steps as demand grows.

  1. ALag strategy
  2. BLead strategyCorrect
  3. CMatch strategy
  4. DSubcontracting strategy

Explanation

A lead strategy adds capacity in anticipation of demand growth, to capture market share and avoid lost sales. A lag strategy adds capacity only after demand is evident, and a match strategy adds it in small increments.

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