311_Session4

311_Session4 - Operations management Session 5: Capacity...

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Session 4 Operations Management 1   Operations management Session 5:   Capacity Management 
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Session 4 Operations Management 2 Today HW #1 due now.  Solutions will be posted  tomorrow at 8 pm.  Quiz #1 today.
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Session 4 Operations Management 3 Previous Class What are the key concepts learned in the last  session? Capacity Bottleneck Throughput time Shifting bottleneck
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Session 4 Operations Management 4 Today’s Class Previous class:  We analyzed the process given  the capacity. Today’s class:  How much capacity do we need to  meet the demand?
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Session 4 Operations Management 5 Capacity Requirement Example A manufacturer produces mustard in two  packages: small (8oz) and family-size (32oz)  bottles.  The forecast demand for the next year is 50,000  small bottles and 35,000 family-size bottles. A single machine can produce 1,000,000 oz  mustard per year. How many machines do we need?
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Session 4 Operations Management 6 Capacity Requirement Example For the mustard production stage, these two  products are identical, Total throughput rate = 8*50000+32*35000 = 1520000 oz/year Capacity of a machine = 1000000 oz/year Two machines with capacity 2000000 oz/year.
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Session 4 Operations Management 7 Utilization Rate Capacity used) (Capacity rate Throughput rate n Utilizatio =
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Session 4 Operations Management 8 Utilization Rate Utilization rate is a measure of efficiency. It measures the percentage of products/services  that the process is producing what it is designed  (suppose) to do. An example: The capacity of a cashier in Starbucks is 96 customers per  shift. The cashier’s throughput rate is only 72 customers per  shift. What is the capacity utilization?  72/96 = 0.75 
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Session 4 Operations Management 9 Utilization Rate What is the meaning of the number 0.75? The cashier is busy only 75% of the time. 25% of the time the cashier is idle and not doing  any productive work. What are the managerial implications?  
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Operations Management 10 Capacity:  Utilization Rate The demand: For red products is 100 units per week For blue products is 90 units per week Which resources are bottlenecks? What are the utilizations?
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This note was uploaded on 04/30/2008 for the course BUAD 311 taught by Professor Vaitsos during the Spring '07 term at USC.

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311_Session4 - Operations management Session 5: Capacity...

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