mod 4 Flashcards
relationship between capacity and economies of scale
as capacity increases economies of scale can be achieved by reducing cost per unit
capacity time horizon
long term
total cost formula
avg fixed cost+ VQ(number of units)
compare design and effective capacity
design capacity=max output under ideal conditions
effective= max output under normal conditions
which value is larger efficiency or utilization
efficiency is larger because it measures actual output where as utilization is measures actual output against design capacity
what part of process defines capacity
bottleneck
how is thruput related to capacity
rate at which it takes to go through full process and can effect the capacity and idle time
If work center capacity = 6 units/hr, throughput
60mins/10 units
If work center throughput = 5 min/unit, capacity
60mins/5 units
difference between parallel and synchronus work centers
parallel duplicate same tasks while synchronous perform different tasks at same time
How does adding a parallel work center affect process throughput?
allows more units to be produced at once
what does break even mean
point where total revenue equals total costs
formula for thruput
inventory/flow time
what does it mean if actual quantity is less then break even
business is operating at a loss
