Final answer:
The main advantage of lag and straddle strategies over a leading strategy is the alignment of capacity increases with actual demand, reducing financial risk and underutilization of resources.
Step-by-step explanation:
The main advantage of lag and straddle strategies for increasing capacity over a leading strategy is that they offer a more cautious approach. Lag and straddle strategies allow a business to increase capacity in smaller increments, aligning closely with actual demand. This minimizes the risk of overinvesting. Conversely, a leading strategy entails adding large capacity in anticipation of future demand, which can lead to underutilized resources and greater financial risk if the expected demand does not materialize.
Another advantage is that lag and straddle strategies often enable a closer match between efficiency improvements and capacity demands. Companies using these strategies can be more flexible, adjusting their capacity closely with demand trends and shifts in the market. This contrasts with the leading strategy where the business has to predict demand far in advance and may end up with either excess capacity or shortages.