Chapter 12

Chapter 12 - Chapter 12: Facilities and Aggregate Planning...

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Chapter 12: Facilities and Aggregate Planning Facilities, aggregate planning, and scheduling form a hierarchy of decisions concerning the capacity of operations extending from long to medium to short range in nature. 1. Facilities decisions (long range) 2. Aggregate planning (medium range) 3. Scheduling (short range) Capacity: the maximum output that can be produced over a given period of times such as a day, week, or year. Capacity can be measured in terms of not only hours of output also in terms of units produced, tons produced, number of customers served, etc. Nominal Capacity: The effective capacity that is obtained by subtracting downtime for maintenance, shift breaks, and equipment utilization that decreased the theoretical capacity available. 12.1 Facilities Decisions Facilities Decisions: These decisions place physical constraints on the amount that can be produced, and they require investment of scarce capital. These decisions are usually made at the very top level by the board of directors or top management. In facilities decisions there are four crucial questions: 1. How much total capacity is needed? 2. How large should each unit of capacity be? 3. When is the capacity needed? 4. What types of facilities/capacity are needed? 12.2 Facilities Strategy Facilities Strategy: Typically considers the amount of capacity, size of units, the timing of capacity changes, and the types of facilities needed for the long run. 1.
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Chapter 12 - Chapter 12: Facilities and Aggregate Planning...

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