Chapter 5 Capacity Planning

Chapter 5 Capacity Planning - Chapter5...

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  Chapter 5    Strategic Capacity Planning for Products  and Services                   
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       Ch. 5: Capacity Planning                
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       Ch. 5: Capacity Planning                
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       Ch. 5: Capacity Planning                 Capacity refers to the upper limit  (ceiling) on the rate of output.     Capacity needs include: People Machines and other equipment Physical space      Other: Financial
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       Ch. 5: Capacity Planning                 Demand Supply Demand Supply Demand Supply Higher prices Inflation Opportunity Loss Prices drop Inventory Waste Ideal
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       Ch. 5: Capacity Planning                 Other aspects of capacity:     Rate of output e.g. units/day     Difficult to define because: Multiple products Changes in product mix $ not a good measure because of price  changes.     Easier to state capacity in terms of inputs.  
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       Capacity Planning                 Goal : Match Supply and Demand Supply : Quantity:       What do I have and what is the mix? How much? How much is usable? Of the usable, how much am I using?       Timing:         When will it be available?    
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       Capacity Planning                 Goal : Match Supply and Demand Demand : Quantity:       What kind of capacity is needed? How much? Timing:         When will the capacity be needed? Unpredictable changes in the environment     
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       Capacity Planning: Importance                  Importance of Capacity Planning  Decisions Lost opportunity (e.g. flu shots, T-shirts) Ability to compete Affect on costs (long term vs short term)      (mass produce, batch, out source?)  Impact on profit Globalization Flexibility
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       Measurement of Capacity                Difficult to measure No single measure appropriate in every  situation Easier to measure in terms of Inputs; e.g. Machine hours Airplane seat miles Number of beds in a hospital    
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       Measuring Capacity                 Measuring what is  available : 1.   Design capacity 2.   Effective capacity     3.   Actual capacity    
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       Measuring Capacity                 1.   Design capacity:  Maximum output     under  ideal  conditions 2.   Effective capacity:  Maximum      output under  realistic  conditions. (break      down, maintenance, scheduling)     Effective capacity is always  less  than Design                   capacity 
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This note was uploaded on 08/31/2010 for the course GSC 3600 taught by Professor Verma during the Winter '10 term at Wayne State University.

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Chapter 5 Capacity Planning - Chapter5...

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