5 Capacity Management

Question 1

How can capacity adjust in different time horizons?

Slide 5

Answer 1

Short-range: Can only use capacity
Intermediate-range: Either modify capacity or use capacity
Long-range Can only modify capacity

Question 2

What are some external factors affecting capacity?

Answer 2

1. Government regulations
2. Supplier capabilities

Question 3

What are some internal factors affecting capacity? (7)

Answer 3

Product and service design
Personnel and jobs
Plant layout and process flow
Equipment capabilities and maintenance
Material management
Quality control systems
Management capabilities

Question 4

What services would change the price to level demand and give some examples?

Answer 4

Services with high fixed costs and low variable costs
An example is golf, airplane, and hotels

Question 5

What are the ways to create capacity flexibility? (6)

Slide 10

Answer 5

1. Flexible workers
2. Flexible facilities
3. Flexible processes
4. Use external capacity
5. Subcontracting
6. Sharing capacity

Question 6

What are the three capacity strategies and what type of business would use each? give an example.

Answer 6

1. Proactive: Where you have excess capacity, used in business where there’s the high opportunity cost of not meeting demand and competing on service, speed, quality, and flexibility. Examples are ICUs, auto dealer
2. Reactive: Willing to have customers leave, used in business with low opportunity cost of not meeting demand and competing of price (low cost). Examples are WalMart or consulting services
3. Combination

Question 7

What are the two ways of measuring capacity and what does each mean?

Answer 7

1. Design capacity is the maximum theoretical capacity called utilization
2. Effective capacity is the Expected capacity given current operating constraints called efficiency

Question 8

Plane boarding Slide 16

Question 9

What are two types of facility layouts and give an example of each

Answer 9

1. Process layout, an example is healthcare
2. Product layout, an example is Ford’s manufacturing

Question 10

Nurses walking Slide 18

Question 11

What is the goal when designing a process layout?

Answer 11

Minimize the movements

Question 12

What method do product layouts use and define it?

Answer 12

Production/Assembly Line Balancing, aims to assign tasks to workstations within a given cycle time and with minimum idle time

Question 13

How to calculate the capacity of two parallel stations that are doing the same thing?

Answer 13

Add them together

Question 14

How to calculate the capacity of two parallel stations that are doing different things?

Answer 14

Take the workstation that produces less of the two (unit/hr)

Question 15

What are the real-world issues with line balancing? (5)

Answer 15

1. Physical restrictions in assigning tasks to stations
2. Individual tasks take longe than the required cycle time
3. Bahviour considerations (boredom, repetition)
4. Variability in times (ex. rework) to accomplish a specific task
5. Mixed-model lines requiring set-ups

Question 16

Solutions to real-world issues w/ line balancing Slide 46-47