Exam 3 Study Guide

# Exam 3 Study Guide - Chapter 9: Capacity Planning and...

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Chapter 9: Capacity Planning and Facility Location Learning Objective 1: Capacity Planning - Capacity – the maximum output rate that can be achieved by a facility. - Capacity Planning – the process of _________________________________________________________________________ ___________________________________________________________________________________ ______________________________ - Two Levels of Capacity Planning: 1. ____________________________________________________________________ e.g. how much and when to spend capital for additional facility and equipment. 2. ____________________________________________________________________ e.g. workforce and inventory levels and day-to-day use of equipment. - The definition “capacity” seems simple, but there is not universal way to measure it! - Two ways for measuring capacity: 1. ____________________________________ versus ____________________________________ Output-oriented measures are easier to understand (e.g. # of cars/hour) but perform poorly when multiple outputs are involved or different products are involved 2. ____________________________________ versus _____________________________________ ___________________________________: the maximum output rate under ideal (theoretical) conditions. ___________________________________: the maximum output under normal (realistic) conditions. - Effectiveness of Capacity Use: Measures how much of __________________________________ is actually being used. Use either effective or design capacity as the denominator. - Example of Computing Capacity Utilization: In the bakery example the design and effective capacity are 30 and 20 custom cakes per day, respectively. Currently the bakery is producing 28 cakes per day. What is the bakery’s capacity utilization relative to both design and effective capacity? The current utilization is only slightly below its design capacity and considerably above its effective capacity

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The bakery can only operate at this level for a short period of time - Review: A clinic has been set up to give flu shots to the elderly in a large city. The design capacity is 50 seniors per hour, and the effective capacity is 44 seniors per hour. Yesterday the clinic was open for ten hours and gave flu shots to 330 seniors. a. What is the design utilization? b. What is the effective utilization? - Best Operating Level: The output that results in the lowest _____________________________________________. Economies of scale – the average cost of a unit produced is reduced when the amount of output is increased Diseconomies of scale – the cost of each additional unit made increase, happen after the best operating level Different facility sizes have different best operating levels. -
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## This note was uploaded on 10/17/2011 for the course MNGT 368 taught by Professor Curthurds during the Spring '08 term at Nicholls State.

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Exam 3 Study Guide - Chapter 9: Capacity Planning and...

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