Capacity - Capacity The throughput, or the number of units...

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1 Capacity þ The throughput, or the number of units a facility can hold, receive, store, or produce in a period of time þ Determines fixed costs þ Determines if demand will be satisfied þ Three time horizons
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2 Modify capacity Use capacity Planning Over a Time Horizon Intermediate- range planning Subcontract Add personnel Add equipment Build or use inventory Add shifts Short-range planning Schedule jobs Schedule personnel Allocate machinery * Long-range planning Add facilities Add long lead time equipment * * Limited options exist Figure S7.1
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3 Design and Effective Capacity þ Design capacity is the maximum theoretical output of a system þ Normally expressed as a rate þ Effective capacity is the capacity a firm expects to achieve given current operating constraints þ Often lower than design capacity
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4 Utilization and Efficiency Utilization is the percent of design capacity achieved Efficiency is the percent of effective capacity achieved Utilization = Actual Output/Design Capacity Efficiency = Actual Output/Effective Capacity
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5 Economies and Diseconomies of Scale Economies of scale
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Capacity - Capacity The throughput, or the number of units...

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