Ch. 5 Capacity Planning for Products and Services

Ch. 5 Capacity Planning for Products and Services - Chapter...

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Chapter 05 - Strategic Capacity Planning for products and services CH. 5 STRATEGIC CAPACITY PLANNING FOR PRODUCTS AND SERVICES Problem 1 a. % 70 10 7 capacity Design output Actual n Utilizatio = = = % 5 . 87 8 7 capacity Effective output Actual Efficiency = = = b. % 67 6 4 capacity Design output Actual n Utilizatio = = = % 80 5 4 capacity Effective output Actual Efficiency = = = c. This is not necessarily true. If the design capacity is relatively high, the utilization could be low even though the efficiency was high. Problem 2 Given : Actual output = .8 (Effective capacity) Effective capacity = .5 (Design capacity) Therefore Actual output = (.5)(.8)(Design capacity) i.e. Actual output = (.4)(Design capacity) capacity Design output Actual = n Utilizatio = (0.4) (Design Capacity) / (Design Capacity) = 0.4 - Design Capacity = (Actual Output) / (Utilization) = 8 / 0.4 = 20 5-1
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Chapter 05 - Strategic Capacity Planning for products and services Problem 3 FC = $9,200/month VC = $ .70/unit Rev = $ .90/unit a. units VC FC Q BEP 000 , 46 70 $. 90 $. 200 , 9 $ P = - = - = b . Profit = (P) x (Q) – (FC + VC x Q) 1. P 61,000 = $.90(61,000) - [$9,200 + $.70(61,000)] = $3,000 2. P 87,000 = $.90(87,000) - [$9,200 + $.70(87,000)] = $8,200 c. . 000
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This note was uploaded on 04/09/2010 for the course GSC 3600 taught by Professor Verma during the Winter '10 term at Wayne State University.

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Ch. 5 Capacity Planning for Products and Services - Chapter...

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