Chap005st - Chapter 05 - Strategic Capacity Planning for...

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Unformatted text preview: Chapter 05 - Strategic Capacity Planning for products and services CHAPTER 5 STRATEGIC CAPACITY PLANNING FOR PRODUCTS AND SERVICES Answers to Discussion and Review Questions 1. Design capacity is the maximum possible output. Effective capacity is the maximum output given product mix, scheduling realities, machine maintenance requirements, and so on. 2. (See Table 52.) 3. Long-term considerations related to the overall level of capacity, while short-term considerations related to variations in capacity requirements caused by seasonality, randomness, and so on. 4. a. Annual seasonality in demand for campgrounds, Christmas trees, Mothers Day cards, snow skis, lawn and garden equipment, snow tires. b. Monthly seasonal patterns are often created by welfare and social security checks being sent out and deposited in banks or increased spending, demand for examinations and registrations at motor vehicle bureaus, subscription renewals and delinquent payment notices. c. Weekly seasonal patterns can be noted in motor vehicle traffic, hotel registrations, supermarket traffic, telephone calls, and demand for auto repair. d. Daily patterns can be noted in restaurants, telephone calls, motor vehicle traffic, supermarket traffic, and so on. 5. Examples of built-in flexibility include buying more land than is currently needed, building larger plants/offices/homes than currently needed, designing facilities in such a way that future expansion will require minimal cost and effort (e.g., electrical, plumbing hookups), room for expanded parking, and so on. 6. This amounts to a systems approach : the different parts of the system are interrelated, so unless the entire system is considered, it is likely that the overall system capacity will suffer. The example used in the book is expansion of a motel without regard to the resulting need to consider expansion of parking, eating and recreational facilities. Similar examples include increased air flights into a city, housing construction (impact on roads, sewers, schools, shopping, etc.) and increasing the capacity of one machine in a series of machines. 7. Capacity in chunks refers to the large stepwise increases that are frequently encountered in capacity decisions. An example would be adding a new machine. It is important because it means that small capacity increases may not be feasible, or that other alternatives (e.g., working overtime instead of buying another machine) may be worthy of consideration. 8. Many schools are attempting to scale-down capacity due to the decrease in school-age children. They are selling or leasing school buildings and consolidating classes. In addition, many districts are laying off teachers and administrators. In contrast, some areas of the sunbelt (e.g., Houston) are experiencing increases in enrollments, and are faced with the opposite problem....
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This note was uploaded on 02/29/2012 for the course BUSINESS 100 taught by Professor Allprofessor during the Spring '12 term at Virginia College.

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Chap005st - Chapter 05 - Strategic Capacity Planning for...

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