Abstract: Managing military capability is a complex and challenging task. Circumstances can change rapidly and forces must be prepared. Insuring excessively against short-term threats by raising levels of preparedness has the effect of stifling long-term force structure development: preparedness and force structure development activities compete for the same limited funding. Preparedness work-up activities and weapon systems acquisitions can have incommensurable lead times. This exacerbates the task of delivering military capability in the form of prepared forces with effective weapons systems, at the precise point in time they are needed. This article suggests how system dynamics modelling can help military capability managers better understand the complex dynamics they confront and the consequences of managerial actions taken in this environment, short-term and long-term, intended and unintended, so that they may make informed decisions and choose most cost-effective military capability management strategies.