This paper addresses the effect of protective capacity on the lead time and throughput of a re-entrant line where statistical fluctuations exist in the form of variation in processing times and machine breakdowns. The specific framework employed in the paper is a five station re-entrant line structured as a closed network mode. This paper argues that protective capacity can be used in conjunction with WIP inventory in order to reduce the lead time and to increase the increase the throughput of a line. Simulation analyses are included to give insight into the effectiveness of protective capacity.