Supply Chain Chp1

  1. Strategic Capacity Planning
    Determine the overall capcity level of captial-intensive resources that best supports the company's long range competitive strategy
  2. Best operating level
    The level of capacity for which the process was designed and the volume of output at which average unit cost is minimized.
  3. Focused Factory
    A facility with a limited set of production objectives.
  4. Plant within a plant
    Designate smaller areas of the plant to serve as a kind of mini-plant for a specific function.
  5. Capacity Coushin
    Capacity in excess of expected demand. This is often expressed as a percentage.

    If demand is expected to be 10 million units, and we are expecting to produce 12 million units, we have a 20% capacity cushin.
  6. Capacity utilization rate
    Capacity used / best operating level


    if the optimum capacity is 500 cars a month and the current production rate is 480 cars a month, the capacity utilization rate is 96%
  7. Short range management
    Less than one month, make changes such as scheduling, personnel transfers and alertantive production routings
  8. Intermediate range planning
    Monthly or quarterly.

    Can use alerternatives such as hiring, layoffs, new tools, subcontracting
  9. Long range planning
    greater than one year.

    Uses Top management decisions and purchasing and liquidating expensive assets
  10. Economies of scope
    A gain in efficiency by increasing scope size such as combining several product production proccesses together.
  11. Balanced system
    A system where each process has the same number of inputs.

    e.g. process 1 produces 90 units an hour, process 2 produces 90 units an hour and so does process 3.

    If process 1 produces 80 units an hour and process 2 produces 150 units an hour there is an imbalance.
Card Set
Supply Chain Chp1