Chapter 5 - Strategic Capacity Planning for Products and Services

Chapter 5 - Strategic Capacity Planning for Products and Services

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Click to edit Master subtitle style 1/5/10 Chapter 5: Strategic Capacity  Planning for Products and  Services Suman Niranjan
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1/5/10 Capacity Planning Capacity It is the upper limit on the load that an operating  unit can handle  Capacity planning plays an  strategic role in  designing of systems  Example 1: How many machines do you need, are  they sufficient  Example 2: How many servers do we need in a  restaurant  The idea behind strategic capacity planning is  the  long term supply capabilities with the long  22
Background image of page 2
1/5/10 Capacity Planning Basic questions in capacity planning What kind of capacity is needed? Depends on products and services that the  management intends to produce or provide How much capacity is needed? Forecasts are the key input When is it needed? Factors that influence the choices of capacity:- The stability of demand The rate of technological changes in equipment and  product design 33
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1/5/10 Capacity Decisions are Strategic Decisions involving capacity  can be  termed as the  most critical for a  organization : Impact on ability of an organization to  meet  future demands  of the products and services When Microsoft released Xbox in 2005 there  were insufficient supplies resulting lost sales and customers Capacity decisions affect the  operating costs Balancing the cost of over- and under  44
Background image of page 4
1/5/10 Capacity Decisions are Strategic Capacity decisions can affect the  competiveness Having excess capacity or  quickly add capacity Capacity affects the  ease of management Appropriate capacity – capacity mismatched Globalization affects the capacity Supply chains and distant markets add to the  uncertainty of capacity need Capacity decisions are usually  long-term  decisions Amount of  investment  and other resources involved 55
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1/5/10 Defining and Measuring Capacity Capacity refers to upper limit on the rate of  output Difficulty in measuring capacity Actually measuring Different interpretations of term “capacity” Identifying suitable measures for specific situation Single Vs. multiple product or service Example of appliance manufacturer Measure of capacity can be number of  available  inputs 66
Background image of page 6
Defining and Measuring Capacity Design capacity Maximum output rate  or service capacity an  operation, process, or facility is designed for Effective capacity Design capacity minus allowances  such as personal  time, maintenance, and scrap Actual output Rate of output actually achieved-- cannot  exceed effective capacity . 77
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 39

Chapter 5 - Strategic Capacity Planning for Products and Services

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online