Capacity Flashcards
1
Q
Productivity =
A
Output/Input
2
Q
How is Capacity Defined?
A
The rate of output a process is capable of.
3
Q
What are three key questions for capacity planning?
A
- WHAT KIND of capacity is needed?
- HOW MUCH is needed to match demand?
- WHEN is it needed?
4
Q
Efficiency =
A
Actual Output / Effective capacity * 100%
5
Q
Capacity Utilization =
A
Actual Output / Design Capacity * 100%
6
Q
What is meant with “economies of scale”?
A
When output rate is smaller than the optimal level, increasing it will result in a lower average cost per unit.
7
Q
How can the Break-even-Point of capacity strategies be calculated?
A
= FC / (R - v)
- R = Revenue
- v = Variable cost per unit
