Business – 9.3 Operations strategy – Lean production | e-Consult
9.3 Operations strategy – Lean production (1 questions)
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The trade‑off can be illustrated as follows:
| Aspect | High Equipment Utilisation | Buffer Capacity |
|---|---|---|
| Responsiveness to demand spikes | Low – little slack to absorb spikes | High – extra capacity can meet sudden demand |
| Cost efficiency | High – assets are fully exploited | Lower – idle capacity incurs cost |
| Risk of over‑production | Higher – pressure to keep machines running | Reduced – production can be paced to demand |
In lean production, the preference is usually for modest utilisation combined with minimal buffers, accepting some loss of efficiency to gain flexibility.