Capacity - DS 412 Operations Management Capacity Planning...

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Unformatted text preview: DS 412 Operations Management Capacity Planning Outline Define Capacity How is it measured? Design and Effective capacity Utilization Efficiency Long term vs short term changes in capacity Analysis Tools Breakeven analysis Decision Analysis (next topic) Define Capacity Capacity is the upper limit on the load that an operating unit can handle (maximum output rate). This includes Equipment Space Labor Capacity has an impact on: The ability to meet future demands Operating costs The initial costs Long-term commitment and planning How is Capacity Measured? It depends on the company, industry, or situation at hand. An airline company: number of seats on a plane Hospital ------------------------------- Restaurant ---------------------------- Furniture manufacturer---------------- Data entry center ---------------------- Relevant Questions: What kind of capacity is needed? How much is needed? Design Capacity and Effective Capacity Design capacity maximum output rate or service capacity an operation, process, or facility is designed for Effective capacity expected output given realistic constraints. It is the design capacity minus allowances such as personal time, maintenance, and scrap Actual output rate of output actually achieved Utilization Utilization = (Actual output)/(Design capacity) Example: Hospital serves 250 patients per day while its design capacity is to serve 400 patients per day. Hospital utilization is 250/400 = 0.625 Example: A data entry center has a design capacity to process 1000 data entry jobs per day....
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This note was uploaded on 11/09/2011 for the course DS 412 taught by Professor Eng during the Fall '07 term at S.F. State.

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Capacity - DS 412 Operations Management Capacity Planning...

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