chapter 5 Flashcards
capacity management in operations is
the ability to hold receive store or accommodate a number of customers in a system. Capacity is the amount of resources inputs available relative to output requirements over a particular period of time
Strategic capacity planning
Finding the overall capacity level of capacity intensive resources to best support the firms long term strategy
Best operating level
output level where average unit cost is minimized
Capacity utilication rate
A measure to reveal how close a firm is to its best operation level
Capacity used/best operating level
Focused factory
when a production facility works best when it focuses on a fairly limited set of production objectives. Typically the focus would relate to a specific product or product group. This concept is focused on the capacity by operationalizing the mechanism by plant within a plant
Plant within a plant
an area in a larger facility that is dedicated to a specific production objective. This can be used to operationalize the focused factory concept
Capacity flexibility
the ability to rapidly increase or decrease production levels or to shift production capacity quickly from one to another
Flexible plants
the ultimate in plant flexibility is the zero changeover time plant. Such a plant can adapt to change by the use of movable equipment, knockdown walls and easily accepssible and reroutable utilities
Flexible processes
Flexible manufacturing processes permit low cost switching from one product to another and enable economies of scope
Economies of scope
when multiple products can be produced at a lower cost in combination than they can be separately
Issues that are important when changing the capacity
maintaining system balance
Frequency of capacity additions (Adding capacity too frequently or too infrequently is expensive)
External sources of operations and supply capacity (some existing external source of capacity by outsourcing or sharing capacity )
Capacity cushion
refers to the amount of capacity in excess of expected demand. IT is the reserve capacity that handles sudden increases in demand or temporary losses of production capacity
Deterministic performance estimation
Design capacity is the theoretical maximum output of a system or process in a given period
There are several important differences between capacity planning in service and manufacturing
Time (service cant be stored for later)
Location (Face to face settings, the service capacity must be located near customer)
Volatility of demand
(not possible to store products, customers interact directly with the product system –> causing fluctuations, Demand is directly affected by consumer behavior (i.e. due to weather)
