Operations Management-capacity utilisation+management

Question 1

Define capacity utilisation

Answer 1

% of total capacity that is actually being achieved in a given period

Question 2

What is capacity management concerned with?

Answer 2

The usage of the resources of a business
Analysis of performance
Capacity planning to aid development

Question 3

What is the calculation of capacity utilisation?

Answer 3

Actual or current level of output/maximum possible output x 100

Question 4

What are the different ways of reaching full capacity?

Answer 4

Increase demand for products produced
Produce different additional products with same resources
Reduce capacity

Question 5

What some constraints on reaching full capacity?

Answer 5

Level of competition 
Stage of product life cycle 
Seasonal products 
Alternatives 
Outsourcing

Question 6

What are some benefits of operating at full capacity?

Answer 6

Average unit cost will fall 
Fixed costs spread out 
Less waste 
Profits increase
Motivated employees
More competitive

Question 7

What are some disadvantages of operating at full capacity?

Answer 7

Little to no opportunity for maintenance
Additional orders harder to meet
Pressure on employees
Quality may decrease

Question 8

What is over-utilisation of capacity?

Answer 8

Short term factor

Resources are pushed beyond their normal levels