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Capacity Planning is generally viewed in three time durations LongRange: greater than one year Where productive resources take a long time to acquire or dispose of long range capacity planning requires top management participation and approval i.e. buildings, equipment, or facilities IntermediateRange: monthly or quarterly plans for the next 6 to 18 months Capacity may be varied by such alternatives as hiring, layoffs, new tools, minor eq subcontracting Short Range: less than one month Tied into the daily or weekly scheduling process and involves making adjustments between planned and actual output. Includes alternatives such as: overtime, personnel transfers, and alternative prod Capacity: implies an attainable rate of output Best operatinglevel: output level where average unit cost is minimized CapacityUtilizationRate: Measure of how close the firm's current output rate is to its b CapacityUtilizationRate= Capacity Used / Best Operating Level Example: Currently building 480 cars/day, Best operating level=500 cars/day Capacity UtilizationRate=480/500=.96 or 96% CapacityFlexibility: having the ability to rapidly increase or decrease production levels, or shif from one product or service to another. DecisionTrees: represents one of the ways how we solve problems with several many possibi Strong (195k)(5)-(210k)=$765k Mo(765k)(55)+(365k)(45)=$ Chapter 4: Strategic Capacity Management Friday, September 27, 2019 Related Questions
What is the correct definition of the capacity of a resource?Capacity, in the context of resource capacity as it pertains to project management, is the amount of time a resource or group of resources is available for productive work in any given time frame.
When evaluating capacity managers need to consider both resource inputs and product output?When evaluating capacity, managers need to consider both resource inputs and product outputs. Capacity can be defined as the amount of available resource inputs relative to requirements for output over a particular period of time. The capacity utilization rate is found by dividing best operating level by capacity used.
What is the approach in determining the overall capacity level of capital intensive resources including facilities etc?A technique used to identify and measure overall capacity of production is referred to as strategic capacity planning. Strategic capacity planning is utilized for capital intensive resource like plant, machinery, labor, etc.
When a firm's design capacity is less than the capacity required to meet its demand it is said to have a negative capacity cushion group of answer choices True False?When a firm's design capacity is less than the capacity required to meet its demand, it is said to have a negative capacity cushion. Because services cannot be stored for later use, service managers consider time as one of their supplies or resources. Unlike goods, services cannot be stored for later use.
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Overtime and personnel transfers are solutions to capacity problems in the intermediate term.
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