Capacity planning Flashcards
WHat is level production strategy?
When you let the production run at the same pace all the time.
Advantages levelled production?
- Smooth, level production avoids labour costs of demand matching
- Are there “sweet spots” regarding production rate?
- Smooth demand on upstream operations
Disadvantages of levelled production
• Build-up of inventory – Can we afford producing “in advance” – cash flow – Other resources being barriers? • Requires accurate forecast – Risk of obsolete inventory
What is chase production?
When you lower the production if the forecast shows low demand and increase it when it’s hihg; chase the forecast.
Advantages Chase production?
Stable inventory
Disadvantages Chase production
- Costs of hiring, training, overtime, extra shifts, etc
- Costs of layoffs and impact on employees
- Possible unavailability of needed work skills, supplier capacity, etc
- Maximum capacity needed
What’s capacity planning with overall factors?
• Uses the same units for expressing capacity requirements as
used in the production plan (e.g. units of finished products)
• Capacity planning is carried out for each end product
• Simple way of planning capacity
Advantages/disadvantages of capacity planning with overall factors?
+ Need for little data
+ Simple calculations
- Affected by changes in product mix
- No lead time off-setting
capacity planning with overall factors environments?
- Simulation capabilities desired (rough but simple)
- Short accumulated lead time
- S&OP and MPS
adv/disadv Capacity planning using capacity bills?
+ Relatively simple and easy to understand
+ Link between end item and resources needed
+ Can handle product mix changes
- Requires data about product structure and operation times
- Does not consider setup times other than in a general manner –i.e. in practice assuming constant order quantities
- No lead time off-setting
Capacity planning using capacity bills environments?
- S&OP and MPS
- Simulation capabilities desirable
- Short set up times and small order quantities
What’s CRP?
• Required capacity is calculated from the starting point of operations
associated with released and planned production orders
• MRP is usually used to generate info about manufacturing orders
• Basic data used for each item, e.g. routing, set-up times, operation
times
• Capacity requirement are calculated individually from the production of
each of the incorporated items separately
CRP characteristics?
- Requires detailed product, inventory, routing and work centre planning data.
- Requires standard items with known planning data.
- Gives very detailed plans (e.g. for single work stations or machines).
- Separates load from planned and scheduled orders.
- Considers the projected available inventory.
- Manages long lead times and varying order sizes
CRP environments?
- High capacity planning accuracy desired
* Order planning and execution and control
