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Lead time with capacity

By Anonymous - Posted on 30 December 2011

Lead time is directly influenced by capacity and load, and in reality, lead times are not fixed.  They vary as the capacity and the load change.  We will approach the discussion by recognizing two situations:  One in which the plant and its work centers are operating below capacity, and the other in which at least one of the plant’s work centers are operating at or above capacity.<?XML:NAMESPACE PREFIX = O />

If the organization is operating below capacity (i.e., it has excess capacity), product lead times are determined strictly by how long it takes to setup and run each job and to move jobs from one work center to the next.  The idea here is that as a job moves into a work center, there is a machine available to set up and run it immediately.  Lead time, in this situation, becomes the simple sum of the times required for the purchased parts, the setup and run operations, and moving the product between operations (with appropriate consideration given to operations that occur in parallel and those that occur in series

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