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business notes

business notes - given that no resource can achieve a...

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18:53 2.2 process capacity – how much something can supply in total over a given unit of time the overall process capacity is determined by the resource with the smallest capacity (bottleneck) flow rate – minimum demand constrained – if the demand is lower than supply, the process would produce at the rate of demand, independent of the process capacity supply constrained – if demand exceeds supply 2.3 time to fulfill x units = x/flow rate 2.4 process utilization = flow rate/process capacity why a process might not produce at 100% utilization if demand is less than supply if there is insufficient supply of the input of a process if one or several process steps only have a limited availability bottleneck is the resource with the highest utilization objective of most businesses is to maximize profit, not to maximize utilization
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Unformatted text preview: given that no resource can achieve a higher utilization than the bottleneck, every process step other than the bottleneck will have a utilization gap relative to the bottleneck process might not always be capacity-constrained, but rather be input or demand constrained (disappears if there is sufficient market demand and full resource availability 2.5 utilization can never exceed 100% implied capacity = capacity requested by demand/available capacity implied capacity over 100% reflects that a resource does not have the capacity available to meet demand over 100% does not make it a bottleneck 2.6 product mix – different types of customers flowing through one process work load – requested capacity of a resource implied capacity – busiest resource...
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