Chapter 5 MGT

Chapter 5 MGT - C hapter 5/ Supplement Learning Objectives...

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Chapter 5/ Supplement Learning Objectives 1. Explain the importance of capacity planning a. Organizations become involved in capacity planning for various reasons. Among the chief reasons are changes in demand, changes in technology, changes in the environment, and perceived threats or opportunities. A gap between current and desired capacity will result in capacity that is out of balance. 2. Discuss ways of defining and measuring capacity. a. Capacity can be defined in two ways: i. Design capacity: the maximum output rate or service capacity an operation, process, or facility is designed for ii. Effective capacity: design capacity minus allowances such as personal time, and maintenance. b. No single measure of capacity will be appropriate in every situation. Rather, the measure of capacity must be tailored to the situation. Look at table 5.1 (188) 3. Describe the determinants of effective capacity. (190) a. Facilities: size, provision for expansion, transportation costs, distance to market, labor supply, energy sources, and layout of the work area are important b. Product and Service Factors: They can have a tremendous influence on capacity. For example, when items are similar, the ability of the system to produce those items is generally much greater than when successive items differ. c. Process factors: the quantity capability of a process is an obvious determinant of capacity. A more subtle determinant is the influence of output quality. For instance, if quality of output does not meet standards, the rate of output will be slowed by the need for inspection and rework activities. d. Human factors: the tasks that make up a job, the variety of activities involved, and the training skill, and experience required to perform a job all have an impact on the
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potential and actual output. e. Policy factors: management policy can affect capacity by allowing or not allowing capacity options such as overtime or second or third shifts. f. Operational factors: Scheduling problems may occur when an organization has differences in equipment capabilities among alternative pieces of equipment or differences in job requirements. Insufficient capacity in one area can affect overall capacity. g. Supply chain factors: Key questions include: what impact
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Chapter 5 MGT - C hapter 5/ Supplement Learning Objectives...

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