Capacity Planning and Management

Question 1

Capacity Planning and Management

Consists of Three Parts

Answer 1

Resource Planning

Rough-Cut Capacity Planning (RCCP)

Detailed Capacity Planning (CRP)

Question 2

Capacity planning and management addresses two managerial problems:

Answer 2

Match capacity to plans–by either providing sufficient capacity to execute plans or adjusting plans to meet available capacity.

Make capacity decisions considering customer service and capacity utilization.

Question 3

Capacity Planning in the MPC System

3 Ranges

Answer 3

Long Range

1. Resource Planning
2. RCCP

Medium Range
1. CRP

Short Range

1. Finite Scheduling
2. Input/OutPut Control

Question 4

Links to MPC Modules

5 Parts

Answer 4

1. RP
   Linked to strategic planning and sales and operations planning (SOP)

Plant and equipment investments, workforce level, etc.

2. RCCP
   Linked to master production schedule (MPS)
   Converting MPS into requirements for key resources
3. CRP
   Linked to material requirements planning (MRP)
   Calculating time-phased capacity requirements to execute material plans generated by MRP
4. Finite Scheduling
   Linked to material requirements planning and shop floor control
   Detailed production scheduling within exact capacity constraints
5. Input/Output Control
   Linked to shop floor control
   Monitoring actual consumption of capacity during the execution of detailed production plans

Question 5

The primary objective of RCCP and CRP techniques

Answer 5

is to estimate capacity requirements

Question 6

Rough-cut capacity planning (RCCP)

Defined As

Answer 6

Capacity planning using overall factors (CPOF)
Capacity bills
Resource profiles

Question 7

Capacity Planning Using Overall Factors (CPOF)

Answer 7

Simplest RCCP technique

Based on planning factors from historical data
Standard total production hours per unit of each product
Overall historical % workloads on work centers

Total capacity requirements are estimated from MPS and standard total production hours per unit of each product

The estimate is allocated to work centers based on overall historical workloads (rather than workloads on work centers of individual products)

Question 8

Capacity Bills

Defined As

Answer 8

A bill of capacity is developed for each end product from its BOM and routing data

The bill of capacity indicates total standard time required to produce one unit of an end product by work center

The capacity requirements for each work center is estimated from the bills of capacity and the MPS data

Requires more data than CPOF

Question 9

Resource Profiles

Answer 9

Rough-cut capacity planning technique that considers production leadtime information
Using operations setback charts

Provides time-phased projections of capacity requirements for individual work centers

Question 10

CPOF (Capacity Planning Using Overall Factors) is simplest, but valid to use only when

Answer 10

when workloads on work centers are similar for all products or product mixes are relatively stable

Question 11

Capacity bills provides more-direct linkage between

Answer 11

individual products and the capacity required for individual work centers

Question 12

Resource profiles consider production

Answer 12

leadtime information, while CPOF and capacity bills do not

Question 13

Capacity requirements planning (CRP) differs from

Answer 13

the rough-cut capacity planning procedures

Question 14

CRP

4 Parts

Answer 14

Utilizes time-phased material plans from MRP

Takes into account components in stock

Accounts for the current status of work-in-process

Takes into account demand for service parts and other demands not accounted for in the MPS

Question 15

MRP and CRP procedures

Answer 15

MRP generates material plans without considering capacity limits (infinite loading)
CRP calculates capacity requirements to examine the capacity implications of those plans
Assumes that if one knows of capacity requirements well in advance, either capacity or plan can be adjusted

Question 16

Advanced planning and scheduling (APS)

Answer 16

Plan materials and capacity simultaneously
Better capacity utilization, faster total production leadtime, lower work-in-process inventories
* APS may also stand for Advanced Production Scheduling

Question 17

Finite scheduling

Answer 17

(or finite loading) is not only a shop scheduling process but also an important part of advanced planning and scheduling
In finite scheduling, work centers are scheduled only up to their capacity limits
Establishes detailed schedules (start and finish times) of each job for each work center
When a work center’s capacity is not sufficient for all planned jobs, prioritization rules determine which jobs will be shifted to later times

Question 18

Vertical loading

Answer 18

Scheduling a work center–independently

Question 19

Horizontal loading

Answer 19

All work centers required to complete a job are taken into account

The highest-priority job is scheduled in all of its work centers, then the job with the next highest priority, and so on

Horizontal loading can be extended to entire product structure (end products, sub-assemblies, and components)

Question 20

Forward scheduling

Answer 20

(or front scheduling)

Starts with the current date scheduling into the future, where each job is completed as early as possible

Question 21

Backward scheduling

Answer 21

(or back scheduling)

Scheduling jobs backward from their due dates

Question 22

Capacity Monitoring with Input/Output Control

Answer 22

One key capacity management issue concerns the match between planning and execution

Capacity data in input/output analysis are usually expressed in hours

Actual input/output vs. planned input/output in each period for each work center

Differences between plan and actual must be addressed

Question 23

Actual/planned input and output

Answer 23

Planned input = Expected arrivals of jobs, expressed in standard hours

Actual input = Actual arrivals of jobs, expressed in standard hours

Planned output = Planned production hours
Results from staffing level, hours of work, etc.

Actual output = Actual quantities completed, expressed in standard hours

“Expressed in standard hours” means quantities multiplied by standard hour per unit

Question 24

Actual Input vs. Planned Input

Answer 24

If actual input consistently larger or smaller than planned input, forecasting should be revisited.

Question 25

Actual Output vs. Planned Output

Answer 25

If actual output is consistently larger or smaller than planned output, standard time should be updated.

Question 26

Actual Input vs. Acutal Output

Answer 26

If actual input is consonantly larger or smaller than actual output, capacity should be charged.