Fundamentals of Capacity Planning Flashcards
What is capacity planning?
The process of determining the production capacity needed by an organization to meet changing demands.
Define design capacity.
The maximum output that an organization can produce under ideal conditions.
How does effective capacity differ from design capacity?
Effective capacity considers real-world constraints like delays and quality issues.
Why is capacity planning important?
It ensures resources are optimized to meet customer demand without over or underutilization.
How is capacity calculated?
Capacity = (number of machines or workers) × (number of shifts) × (utilization) × (efficiency).
What is the purpose of capacity planning in business?
To match production capabilities with demand to minimize inefficiencies and improve profitability.
What is OEE, and why is it important in capacity planning?
OEE (Overall Equipment Effectiveness) helps measure and optimize machine utilization.
What happens when there’s a discrepancy between capacity and demand?
It leads to inefficiency, such as underutilized resources or unmet customer needs.
What are some ways to increase capacity?
Adding shifts, increasing workforce, acquiring new equipment, or improving techniques.
Why is data important in capacity planning?
Accurate data allows reliable demand prediction and effective scheduling.
