ISM3600 Ch5 and 5s

ISM3600 Ch5 and 5s - 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 Major determinant of initial costs Involves long-term commitment Affects competitiveness Capacity Planning: Measurement Measurement of Capacity:-Measurement in terms of output units -Measurement in terms of input units Example : Input Measure Output Measure . ----------------------------------------------------------------------- Auto manufacturing Labor hours, machine hours Number of cars per shift Steel mill Furnace size Tons of steel per day Restaurant # of tables, # of seats # of meals served per day Theater # of seats available # of tickets sold per performance 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 = -------------------- Utilization = --------------------- Actual Output Effective capacity 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 = = = 90% Utilization= = = 72% Actual output Effective Capacity 36 40 Actual output Design Capacity 36 50 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 Attempt to smooth out capacity requirements -uneven capacity requirements -products with complementary demand pattern 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: 2 Consider the a system consisting of two operations performed in a sequence with capacities as shown.--------- -------- A B--------- -------- 13 units/hour 15 units/hour Since A has less capacity than B, the bottleneck operation is A. The system capacity is 13 units/hour. Example: 3 Consider the a system consisting of four operations performed in a sequence with capacities as shown....
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ISM3600 Ch5 and 5s - Ch. 5: Capacity Planning Definition:...

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