11: DELIVER: Capacity planning & control Flashcards
What is capacity management?
The way operations organize their maximum level of value-added activities (over a period of time) a process can achieve under normal operating conditions
What is planning and control?
Deciding how an operation should react to changes in demand
what are the 4 capacity planning and control strategies
long term: physical long term, usually one-year
medium term: forecasts 2-18months
short term: short period
aggregate (total): making overall broad capacity decisions
what are the steps in capacity planning and control
1: measuring aggregate demand and capacity
2: identify alternative capacity plans
3: choosing the most appropriate capacity plan
What does capacity planning affect?
5 performance objectives, revenue, working capital
how is capacity demand being measured
forecasting demand changes: it needs to be accurate, give indication of relative uncertainty, and needs to be expressed in terms which are useful for planning and control
what are the two demand types that can occur in almost every product or service
demand and supply seasonality. These occur usually over a year but for instance it is shorter in a supermarket. Causes: politics, season, festive, behavioral, financial, social. Examples for seasonal products and services: doctors, fireworks, food, beverages, travel, holidays, services….
how can you measure capacity
input and output capacity measure. Design capacity: 168 hrs (plan), effective: (actual) 105 hrs. output: 90. Output is even lower than effective capacity due to some breakdowns, quality problems etc.
how do you calculate usage of capacity
utilization: actual/design
efficiency: actual/effective
what is OEE, formula, everything…
Overall equipment efficiency, which measures availability, speed and quality.
OEE=pqa
a=total operating time/loading time
q=valuable operating time/net operating time
p=net operating time/total operating time
What causes what: a=breakdowns, not worked, changeover
p=slow running equipment
q=quality loss
reaching high levels of performance is vital
what are the alternative capacity plans
level capacity plan: ignore change and keep activity level constant
chase demand plan: adjust capacity to reflect the changes in demand.
demand management: attempt to change demand to fit capacity availability (through price, alternative products..)
what is yield management +examples
collection of methods that can be used to ensure that an operation maximises its potential to generate profit.
such as airlines( there is a limited, FIXED capacity, market can be segmented and service cannot be stored and service is sold in advance)
how to choose capacity planning and control approach?
it is important for operations to choose a method which assesses the consequences of adopting a capacity plan. for this Cumulative representation and Queuing theory can be used.
Describe cumulative representations
+allows feasibility of alternative capacity plans to be assessed
-not every month has the same productive time
Describe queueing theory
its useful for operations where outputs cannot be stored, so basically or service operations.
calling population: customers
queue: waiting line
arrival rate: rate how customers arrive to be served
rejecting: when waiting line exceeds its maximum number, some people get rejected
balking: some people just walk away when seeing the queue
reneging: people get out of line after waiting for some time
queue discipline: order in which people are waiting to be served. FIFO usually
servers: facility processing people
