Mini case 2 info

Mini case 2 info - Mini case 2 info Dr. Drew's Mini-Lecture...

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Dr. Drew's Mini-Lecture From a prior incarnation of this class, but might give you some additional insight! Peru State College Mini Lecture – Capacity Planning Written by Dean Todd Drew (now VPAF - Congratulations!) Capacity planning decisions are among the most important strategic decisions we can make. This is because many of our capacity enhancement alternatives may have a significant cost (e.g., the cost of building a new factory), take a long time to implement (even negotiations to have another firm produce under contract for you may take months or years), impact peoples’ lives (layoffs are not to be done lightly), and involve a great many assumptions that need to be challenged along the way (like long run sales forecasts). Capacity = how much we can make or do in a given time period. There may be a difference between design (sometimes called theoretical) capacity, effective capacity and actual output. Example: To give you a sense of how capacity planning is an issue for many industries beyond those involving traditionally manufactured goods, consider the corrections industry today. I’ve read many articles indicating jails and prisons were designed for one level of inmate population, but because of higher than expected demand, they operate above their design capacity (which the text says can’t happen). How do they do this? Usually by bending or breaking the design criteria in practice. Cells designed for two beds may have a third stuck in. Yards designed for inmate exercise may end up having tents or modular units placed in them. Of course you can’t exceed design capacity forever without having operating consequences. In factories, the consequences might include exhausted workers, more accidents, and more equipment failures. In prisons, you might expect more riots or lawsuits. All of these are matters of capacity planning. We have to decide what kind of capacity is needed, how much is needed, and when it is
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This note was uploaded on 11/13/2010 for the course BUS BUS 335 taught by Professor Griffin during the Fall '07 term at Peru State.

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Mini case 2 info - Mini case 2 info Dr. Drew's Mini-Lecture...

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