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23download_doc-15.php - Ops Session 7 Capacity Management...

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Ops Session 7 Capacity Management Strategic capacity planning o Capacity can be defined as the ability to hold, receive, store, or accommodate Also the ability to create o Strategic capacity planning is an approach for determining the overall capacity level of capital intensive resources, including facilities, equipment, and overall labor force size. Capacity utilization o Capacity utilization = capacity used/best operating level o Capacity used Rate of output actually achieved o Best operating level Capacity for which the process was designed usually maximum you’ve had at one point Example of capacity utilization o During one week of production, a plant produced 83 units of a product. Its historic highest or best utilization recorded was 120 units per week. What is this plant’s capacity utilization rate Capacity utilization rate = capacity used/best operating level =83/120 =0.69 or 69% Capacity focus o The concept of the focused factory holds that production facilities work best
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This note was uploaded on 04/18/2011 for the course BUS 370 taught by Professor Camp during the Fall '09 term at Indiana.

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23download_doc-15.php - Ops Session 7 Capacity Management...

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