Strategic Capacity Planning

Question 1

is the upper limit or ceiling on the load that an operating unit can handle.

Answer 1

Capacity`

Question 2

True or False. The goal of capacity planning is to achieve a match between the short-term supply capabilities of an organization and the predicted level of long-term demand.

Answer 2

False. long-term supply*

Question 3

What are the basic questions of capacity planning?

Answer 3

What kind of capacity is needed?
How much is needed?
When is it needed?

Question 4

The ff are importance of capacity planning except:
a. Impacts ability to meet future demands
b. Globalization adds complexity
c. Major determinant of initial costs
d. Impacts short range planning

Answer 4

D. impacts short range planning. Long*

Question 5

maximum output rate or service capacity an operation, process, or facility is designed for

Answer 5

Design capacity

Question 6

Design capacity minus allowances such as personal time, maintenance, and scrap

Answer 6

Effective capacity

Question 7

rate of output actually achieved–cannot
exceed effective capacity.

Answer 7

Actual Output

Question 8

formula of efficiency

Answer 8

actual ouput/effective capacity

Question 9

formula of utilization

Answer 9

actual output/design capacity

Question 10

determinants of effective capacity

Answer 10

facilities, products and services, process factors, human factors, policy factors, operational factors, supply chain factors, external factors

Question 11

Facilities

Answer 11

Design, location, layout, environment

Question 12

Product/Service

Answer 12

Design, product/service mix

Question 13

Process

Answer 13

quantity capabilities, quality capabilities

Question 14

Human factors

Answer 14

job content, training & experiences, motivation & compensation, absenteeism and labor turnover

Question 15

Operational

Answer 15

Scheduling, materials management, quality assurance, maintenance policies

Question 16

External factors

Answer 16

Product standards, safety regulations, unions, pollution control standards

Question 17

Builds capacity in anticipation of future demand increases

Answer 17

Leading capacity strategy

Question 18

When demand exceeds current capacity

Answer 18

Following capacity strategy

Question 19

Similar to Following Capacity Strategy, but it adds capacity in relatively small increments to keep pace with increasing demand.

Answer 19

Tracking capacity strategy

Question 20

formula of capacity cushion

Answer 20

Capacity cushion= (100% - Utilization)

Question 21

Steps for Capacity Planning

Answer 21

1 Estimate future capacity requirements
2 Evaluate existing capacity
3 Identify alternatives
4 Conduct financial analysis
5 Assess key qualitative issues
6 Select one alternative
7 Implement alternative chosen
8 Monitor results

Question 22

relates to overall level of capacity

Answer 22

long-term forecasting capacity

Question 23

Relates to variations from capacity requirements

Answer 23

short-term forecasting capacity

Question 24

Capacity and location are closely tied

Answer 24

need to be near customers

Question 25

Capacity must be matched with timing of demand

Answer 25

inability to store services

Question 26

Peak demand periods

Answer 26

Degree of volatility of demand

Question 27

An operationin a sequence of operations whosecapacity is lower than that of theother operations

Answer 27

Bottleneck operation

Question 28

If the output rate is less than the optimal level, increasing output rate results in decreasing average unit costs

Answer 28

ECONOMIES OF SCALE

Question 29

If the output rate is more than the optimal level, increasing the output rate results in increasing average unit costs

Answer 29

DISECONOMIES OF SCALE