The common method used to increase capacity with a lag strategy is overtime and subcontracting.
What is lag strategy?
The Lag Strategy is much more conservative than the Lead Strategy as it waits until the current capacity is stretched to its limits before adding more capacity. In this strategy, manufacturers respond to an actual increase in demand and boost capacity after the current operation runs in full steam.
What is overtime and subcontracting?
Subcontracting as a resource of capacity available in a continuous-time context, which can be used throughout a period. The term overtime, on the other hand, is reserved for the resources used at discrete intervals, such as end of a day or a week, to handle emergency situations.
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