What is Lag strategy?
What is Lag strategy?
Lag Strategy is a part of Capacity Planning.
Capacity Planning refers to the process used by a business to determine the resources it will need to meet the demand for its products or services. The more capacity a company has, the more output it has of goods and services that it can produce to satisfy the demand of its customer. If there's a lack of capacity, customer needs are not served as quickly, and then the customers may be lost to competition. On the other hand, excess capacity means company money is being spent inefficiently. It could have been invested elsewhere for a profit, such as a new business venture or just a simple interest-bearing savings account.
There are 3 types of capacity planning:
- Lead Strategy
- Lag Strategy
- Average strategy
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