OM-L8_ch9 - Chapter 9 Capacity Planning Facility Location...

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Chapter 9 Capacity Planning & Facility Location Operations Management
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Learning Objectives Define capacity planning and location analysis Describe relationship between capacity planning and location, and their importance to the organization Explain the steps involved in capacity planning and location analysis Describe the decision support tools used for capacity planning Identify key factors in location analysis Describe the decision support tools used for location analysis
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Capacity planning Capacity is the maximum output rate of a production or service facility Capacity planning is the process of establishing the output rate that may be needed at a facility: Capacity is usually purchased in “chunks” Strategic issues: how much and when to spend capital for additional facility & equipment Tactical issues: workforce & inventory levels, & day-to-day use of equipment
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Measuring Capacity Examples There is no one best way to measure capacity Output measures like kegs per day are easier to understand With multiple products, inputs measures work better Type of Business Input Measures of Capacity Output Measures of Capacity Car manufacturer Labor hours Cars per shift Hospital Available beds Patients per month Pizza parlor Labor hours Pizzas per day Retail store Floor space in square feet Revenue per foot
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Capacity Information Needed Design capacity: Maximum output rate under ideal conditions A bakery can make 30 custom cakes per day when pushed at holiday time (short period) Use temporary measures such as overtime, overstaffing, use equipment to the maximum and subcontracting
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  • One '14
  • Distance, Capacity utilization, Dayton, Mansfield

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