The strong effect of flexible capacities on achievable WIP levels and throughput times : a simple model and its implications

Setting WIP levels at the workstations of a production is an important task: WIP levels affect throughput times as well as utilisation rates. Consequently, they also impact the delivery times to customers and the productivity. Queueing theory provides profound knowledge regarding the factors for determining suitable WIP levels. However, the existing models have been neglecting the important influence of capacity flexibility. This paper suggests an extension of the well-known Kingman equation to model the impact of flexible capacities on the required WIP levels. Simulation experiments have shown that the model is able to accurately forecast the utilisation level of a workstation for different factor levels of capacity flexibility, WIP and load variance. Companies can use the model to set consistent target levels for these factors.