P 301 Chapter 5 Strategic Capacity Planning for Products and services

  1. strategy
    what are we moving towards, where are we going ( normal a 5 year plan)
  2. all organization must be thinking into the future and where they want to be.
  3. Capacity Planning
    • how much a company can handle (ex IUS building, class size, parking lot)
    • the investment in things that would effect are output
  4. Capacity
    • the upper  limit or ceiling on the load that operating unit can handle
    • Delimans excited do to compasity
    • - it takes time its not emedited
  5. if we have more capacity then demand 
    if you have more demand then capacity
    we lose money

    lose market share
  6. Capacity vs Load
    • - is a rate at which work is drawn from the system
    • - is the volume of work in the system (how much we are dumping into the system)
    • Ex Funnel
  7. strategic capacity planninng GOAL
    to achieve a match between the long term supply capabilities of an organization and the predicted level of long term demand
  8. capacity planning questions
    • what kind of capacity is needed?
    • How much is needed to match demand?
    • When is it needed?
  9. a no constraint already has extra capacity
    sometime paying a premium to fix a constraint can pay off in the long run
  10. Acutal output
    • the rate of output actually achieved
    • it cannot exceed effective capacity
  11. design and effective  capacity
    effeciency- is always larger by %
    • - the maximum output rate or service capacity an operation, process , or facility is disgned for
    • - design capacity minus allowance such as time, and maintenance
  12. capacity buffers (cushion)
    • extra capacity to offset demand uncertainty
    • capacity cushion = 100% Utilization
    • -time
  13. service capacity planning challenges
    • the need to be near customers
    • the i anbility to store service
  14. demand management strategies
    strategies used to offset capacity limitations and that are intended to achieve a closer match between supply and demand
  15. in House or Outsource and factor to consider
    • Organization must always ask decide whether to produce a good or servie itself or outsource ( make or buy discsions)
    • -is it a constraint
    • -available capacity
    • expertise
    • quality considerations
  16. developing capacity alternatives things that can be done to enhance capacity management
    • design flexibility into system
    • take stage of life cycle into account
    • take a "big picture" approach
  17. design capacity
    effective capacity
    • the maxium designed service capacity or output rate 
    • design capacity minus allowance such as personal time, equipment maintenance, delays due to scheduling problems, and changing the mix of products
  18. Efficiency=
    • Actual output/effective capacity
    • Actual outputs/design capacity
  19. cost volume analysis
    focuses on the relationship between cost, revenue, and volume of output
  20. Break Even Point (BEP)
    The volume of output at which total cost and total revenue are equal
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P 301 Chapter 5 Strategic Capacity Planning for Products and services
exam 2