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In today’s supply chains, there are a lot of uncertainty. The proliferation of products, build-to-order, shorter order-to-delivery cycles, and increased personalization create highly variable demand patterns. There are tools with different scopes and foci to help manage this: from targeted tools to supply chain wide broader tools. In addressing this challenge, we focus on buffering variability with capacity and look at how to utilize production/service capacity as a lever to effectively operate under uncertainty. Many factors, varying from competitive priorities to costs, need to be considered and depending on the situation the right action should be taken. We present insights that tell us how this can be done under different conditions by effective capacity decisions.

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