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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 longterm 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 achievedcannot 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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This document was uploaded on 02/14/2011.
 Spring '11

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