Ch5 and 5sGSC - Ch. 5: Capacity Planning Definition:...

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Unformatted text preview: Ch. 5: Capacity Planning Definition: Capacity is the upper limit on the load that an operating unit can handle. The operating unit can be a plant, department, machine, store or a worker . Basic Decisions in Capacity Planning What kind of capacity is needed? (Labor/Technology) How much is needed? (size) When is it needed? (timing) Importance of Capacity Decisions Impacts ability to meet future demands Affects operating costs Involves long-term commitment Capacity Planning: Measurement Measurement of Capacity: Input Measure -Measurement in terms of output units -Measurement in terms of input units Input Measure Output Measure----------------------------------------------------------------------------------------------- Auto manufacturing Labor hours per day Number of cars per shift Steel mill Furnace size available per day Tons of steel per day Restaurant # of tables, # of seats per day # of meals served per day Theater # of seats available per day tickets sold per day Design capacity: Maximum obtainable output Effective capacity: Maximum capacity given product mix, scheduling difficulties, and other doses of reality. Actual output: Rate of output actually achieved--cannot exceed effective capacity. Efficiency = (Actual Output) / Effective Capacity Utilization = (Actual Output) / Design capacity Example 1: Given the following information compute the efficiency and utilization of the vehicle repair department Design Capacity = 50 trucks per day Effective Capacity = 40 trucks per day Actual Output = 36 trucks per day Efficiency = (Actual Output) / Effective Capacity =36 / 40 = 0.90 or 90% Utilization = (Actual Output) / Design capacity = 36 / 50 = 0.72 or 72% Example 2: Given the following information compute the effective capacity and utilization of a production system Design Capacity = 100 units per day Efficiency = 70% Actual Output = 60 trucks per day Let X denote the Effective Capacity Efficiency = 0.70 = 60 / X; Hence X = 60/0.70 86 Utilization = 60/100 = 0.60 or 60% Developing Capacity Alternatives Design flexibility into systems -provision for future expansion -possible changes in layout design Take a big picture approach to capacity changes -interrelationship between parts of the system -bottleneck operation Prepare to deal with capacity chunks - desired capacity and feasible capacity Bottleneck Operation A bottleneck operation is an operation whose capacity in a sequence is lower than the capacity of any other operation in the sequence. As a consequence, the capacity of a bottleneck operation limits the system capacity to the capacity of the bottleneck operation. Example: 3 Consider the a system consisting of two operations performed in a sequence with capacities as shown....
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Ch5 and 5sGSC - Ch. 5: Capacity Planning Definition:...

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