Use of external capacity Operations Management Assignment Help

Use of external capacity.

Two common strategies for creating flexibility by using the capacity of other organizations are subcontracting and sharing capacity. An example of subcontracting is Japanese banks in California subcontracting check-clearing operations to the Wells Fargo Bank of California's check clearinghouse. An example of sharing capacity is two domestic airlines flying different routes with different seasonal demands exchanging aircraft (suitably repainted) when one's routes are heavily used and the other's are not.

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