Chapter 5 Capacity Management

Question 1

the amount of resource inputs available relative to output requirements over a particular period of time

Answer 1

capacity

Question 2

what are the 3 durations in which capacity planning is viewed

Answer 2

1. long range - greater than one year
2. intermediate range - monthly or quarterly plans for the next 6-18 months
3. short range - less than one month

Question 3

finding the overall capacity intensive resources to best support the firms long term strategy

Answer 3

strategic capacity planning

Question 4

the level of capacity for which the process was designed and the volume of output at which average unit cost is minimized

Answer 4

best operating level

Question 5

measure of how close the firms current output rate is to its best operating level (percent

Answer 5

capacity utilization rate

Question 6

capacity used/best operating level

Answer 6

capacity utilization rate

Question 7

idea that as the plant gets larger and volume increases, the average cost per unit drops. At some point, the plant gets too large and cost per unit increases

Answer 7

economies of scale

Question 8

can a plant become too large

Answer 8

yes and diseconomies of scale become a problem

Question 9

a facility designed around a limited set of production objectives. Typically the focus would relate to a specific product or product group

Answer 9

focused factory

Question 10

an area in a larger facility that is dedicated to a specific production objective. This can be used to operationalize the focused factory concept

Answer 10

plant within a plant (PWP)

Question 11

having the ability to rapidly increase or decrease production levels, or to shift production capacity quickly from one product or service to another

Answer 11

capacity flexibility

Question 12

zero-changeover-time plant, using movable equipment, knockdown walls, and easily accessible and reroutable utilities, such a plant can quickly adapt to change

Answer 12

flexible plants

Question 13

epitomized by flexible manufacturing systems on the one hand and simple, easily set up equipment on the other

Answer 13

flexible processes

Question 14

when multiple product can be produced at Lower cost in combination that they can be separately

Answer 14

economies of scope

Question 15

have multiple skills and the ability to switch easily from one kind of task to another

Answer 15

flexible workers

Question 16

what are the 2 types of costs to consider when adding capacity

Answer 16

1. the cost of upgraading too frequently
2. cost of upgrading too infrequently

Question 17

capacity in excess of expected demand

Answer 17

capacity cushion

Question 18

a schematic model of the sequence of steps in a problem and the conditions and consequences of each step

Answer 18

decision tree

Question 19

the average number of customers that come to a facility during a specific period of time

Answer 19

arrival rate

Question 20

the average number of customers that can be processed over the same period of time when the facility is operating at maximum capacity

Answer 20

service rate

Question 21

obtain (goods or a service) from an outside or foreign supplier, especially in place of an internal source

Answer 21

outsourcing

Question 22

capacity that is designated to be used in part for the Devices, including components or parts thereof, and in part for other purposes

Answer 22

sharing capacity