Capacity planning, del 2 Flashcards
How to measure capacity?
Production
- The real output during a time period.
Productivity
- Total: Production in relation to the quantity of input
- Partial: Production in relation to the quantity of a particular input
Capacity
Name the different kinds of capacity
Theoretical capacity
Effective capacity
Safety capacity
Describe theoretical capacity
The maximum rate of output that can be produced in a period of time under ideal conditions
Describe effective capacity
The actual capacity that can reasonably be expected to be achieved in the long run under normal operating conditions
Setup time är viktig faktor i att bestämma denna!
Kort setup time ökar capacity och improve flexibility by allowing rapid changeovers to different models or products on manufacturing or assembly lines
Describe safety capacity
Planned loss. Capacity reserved for unanticipated events such as demand surgers, material shortages and equipment breakdowns
Safety capacity = Theoretical capacity - Effective capacity
What is real output, production, in relation to the different capacities?
Effective capacity - Avoidable loss = Real output
Formula for utilization and efficiency
Utilization = Actual output / Theoretical capacity (what we could get)
Efficiency = Actual output / Effective capacity (normal service)
How should the decisions about capacity planning be made?
They should be based on the effective capacity rather than on theoretical. Ideal operations are nearly impossible to sustain.
The effective capacity must be at least as large as average demand to satisfy customers in the long run.
What is work order?
Specification of work to be performed for a customer or a client
Formula for service and manufacturing work order.
What does everything mean?
Service work order
Ci = + (Si + Pi) * Qi
Manufacturing work order
Ci = Si + (Pi * Qi)
Ci = capacity requirements in units of time for work order i
Si = setup or changeover time for work order i as a fixed amount that does not vary with volume
Pi = processing time for each unit of work order i, actual production
Qi = size of order i in number of units, quantity produced
Formula for number of staff required
What does everything mean?
Number of staff required
Ni = (Fi * Pi) / (H * Di * Ei)
Ni = capacity requriements in number of staff for work order i
Fi = forecasted demand in units for the period
Pi = Ideal processing time for each unit of work order i
H = work hours / person / day
Di = Number of workdays in the period
Ei = Effective capacity in relation to the ideal capacity
What is the capacity planning process?
Determine capacity required
Identify capacity imbalances
- Capacity imbalance = Capacity available – capacity required
Develop alternative solutions to resolve imbalances
Evaluate the alternatives and chose the best one (the least costly)
What does long-term capacity strategies address?
The trade-off between the cost of capacity and the opportunity cost of not having adequate capacity (bigger decisions)
Three long-term capacity strategies
Complementary goods and services
Capacity expansion strategies
Level production or chase demand
Describe Complementary goods and services
Produced or delivered using the same resources available to the firm, seasonal demand patterns of the resources are out of phase with each other.
Balance those seasonal demand cycles by using available excess capacity.
Describe Capacity expansion strategies
One large capacity increase
Small capacity increases that match demand
Small capacity increases that lead demand
Small capacity increases that lag demand
Describe Level production or chase demand
These are pure strategies and besides these, mixed strategies can be adopted. The choice of strategy depends on trade of between costs (inventory costs vs e.g. setup costs).
For services only chase demand since build up is not possible
