Ch 9 - Capacity Planning & Facility Location Flashcards
capacity
the maximum output rate that can be achieved by a facility
capacity planning
the process of establishing the output rate that can be achieved by a facility
design capacity
the maximum output rate that can be achieved by a facility under ideal conditions
effective capacity
the maximum output rate that can be sustained under normal conditions
capacity utilization
percentage measure of how well available capacity is being used; actual output divided by effective capacity or design capacity
best operating level
the volume of output that results in the lowest average unit cost
economies of scale
a condition in which the average cost of a unit produced is reduced as the amount of output is increased
diseconomies of scale
a condition in which the cost of each additional unit made increases
focused factories
facilities that are small, specialized, & focused on a narrow set of objectives
capacity cushion
additional capacity added to regular capacity requirements to provide greater flexibility
decision tree
modeling tool used to evaluate independent decisions that must be made in sequence
expected value (EV)
a weighted average of chance events, where each chance event is given a probability of occurrence
location analysis
techniques for determining location decisions
globalization
the process of locating facilities around the world
factor rating
a procedure that can be used to evaluate multiple alternative locations based on a number of selected factors
load-distance model
a procedure for evaluating location alternatives based on distance
rectilinear distance
the shortest distance between two points measured by using only north-south and east-west movements
