Capacity Management

Question 1

Capacity (2)

Answer 1

Maximum output rate for a process, level of production per unit of time

Question 2

Capacity Utilization

Answer 2

degree to which capacity is being used to generate products or services

Question 3

Utilization Rate

Answer 3

output rate/effective capacity

Question 4

Effective Capacity

Answer 4

maximum output that can be reasonably be sustained under normal conditions

Question 5

Peak Capacity

Answer 5

Maximum Output that can be sustained under ideal conditions

Question 6

Measuring Process Performance (3)

Answer 6

Throughput Time
Work In Process Inventory
Little’s Law (output rate)

Question 7

Throughput Time

Answer 7

Total time it takes unit to move through entire process

Question 8

Little’s Law

Answer 8

Work In Process
Throughput Output Rate

Question 9

Work In Process Inventory

Answer 9

Units in system not including finished goods

Question 10

Bottlenecks

Answer 10

Determines output rate for entire system, not necessarily longest process

Question 11

Internal Bottleneck

Answer 11

satisfies demand, lowers capacity of other processes

Question 12

External Bottleneck

Answer 12

Impacts companies ability to satisfy demand

Question 13

System Variability

Answer 13

individual operations build varaiability

Question 14

Dependent Operations

Answer 14

Joining processes that feed into each other

Question 15

Blocked Operations

Answer 15

operation that cannot pass processed units to the next operation

Question 16

Starved Operations

Answer 16

operations with unused capacity because they have run out of work to process

Question 17

Managing Variability (2)

Answer 17

1. Increase staff/machinery
2. Decouple - avoid starved downstream

Question 18

Process Management Triangle: Increase Variability

Answer 18

Increase capacity cushion or Inventory

Question 19

Process Management Triangle: Decrease Inventory

Answer 19

Decrease variability or Increase Capacity cushion

Question 20

Process Management Triangle: Decrease Capacity Cushion

Answer 20

Decrease Variability or increase inventory

Question 21

Theory of constraints (3)

Answer 21

Dum, Rope, Buffer

Question 22

Drum

Answer 22

Bottleneck sets rhythm for entire process

Question 23

Rope

Answer 23

Inputs into the bottleneck are pulled in at pace set by bottleneck

Question 24

Buffer

Answer 24

Buffer inventory stored around bottleneck so it is never starved

Question 25

Theory of Constraints steps (5)

Answer 25

1. Identify
2. Exploit
3. Subordinate
4. Elevate
5. Maintain

Question 26

Identify

Answer 26

Bottleneck

Question 27

Exploit

Answer 27

Ensure schedule maximizes throughput at bottleneck

Question 28

Subordinate

Answer 28

operations scheduled around bottleneck

Question 29

Elevate

Answer 29

bottleneck is a constraint, increase its capacity

Question 30

Capacity Cushion

Answer 30

“Reserve capacity” firm maintains to manage variability (100% - utilization rate)

Question 31

Capacity Cushion Triangle

Answer 31

Variability
Capacity Cushion
Inventory