Capacity choice to maintain service lead time

3 Capacity Choice to Maintain Service Lead Time 

orders placed in a supply chain face lead times for delivery based on the presence of supply constraints, or capacity constraints. We provide a model to understand the source of such lead times—in this case, it is due to capacity (or supply) and demand mismatches. 

Consider a single location of capacity, such as a warehouse or man-ufacaiurer. Orders arrive to this location, and the facility operates in a 

It can be shown that the probability that the location is busy or producing an order is —. The ratio — is also known as the system load, often 

Therefore the expected time an order spends in the queue waiting for service is 

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See also in sourсe #XX -- [ , , ]

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