Chapter 5: Strategic Capacity Planning Flashcards
strategic capacity planning involves:
long-term demand forecasting and supply planning
one of the most critical services for strategic capacity planning is
electricity
Strategic capacity planning: planning electricity is particularly challenging because:
it is not enough that total electricity generated equals total electricity demand in a year or even a month
strategic capacity planning: supply should equal demand every time which means:
the installed capacity should meet peak demand however peak demand is hard to predict
There are two definitions of capacity:
design capacity
effective capacity
design capacity
the maximum output rate under ideal conditions
effective capacity
that maximum output rate that that can be sustained given work breaks, product mix, scheduling difficulties, expected delays, and other realities. (also known as standard output rate)
actual output
rate of output actually achieved-cannot exceed effective capacity
two measures of operating capacity are commonly used:
- efficiency
- utilization
efficiency
the ratio between actual output and effective capacity
efficiency = actual output/effective capacity
utilization
the ratio between actual output and design capacity
utilization = actual output/design capacity
what is process?
a collection of tasks, connected by flow of goods and information that transforms various inputs into more valuable outputs
basic process measures
flow unit,
input rate,
output rate
capacity
capacity
defined as the maximum possible output rate
in a production line, the slowest process or the process with the least capacity is referred to as?
the bottle neck,
the operation that limits the output or service rate of the entire process
