Test 2 Flashcards
Capacity
The upper limit on the load an operating unit can handle.
What affects capacity needs?
Equipment
Space
Employee skills
What is the goal of strategic capacity planning?
To match long-term supply capabilities and predicted levels of long-term demand.
Overcapacity
Operating costs that are too high.
Undercapacity
Strained resources and possible loss of customers.
Key questions for capacity planning
What kind of capacity is needed?
How much is needed to match demand?
When is it needed?
Three capacity strategies
Leading
Following
Tracking
Leading capacity strategy
Build capacity for future demand increases
Following capacity strategy
Build capacity when demand exceeds current capacity
Tracking capacity strategy
Similar to following but in smaller increments.
Design (Theoretical) Capacity
Maximum output rate or service capacity an operation is designed for
Effective Capacity
Design capacity minus inefficiencies.
Cannot exceed design capacity.
Actual output
rate of output actually achieved - cannot exceed effective capacity
Efficiency equation
Actual output/effective capacity x 100%
Utilization equation
Actual output/design capacity x 100%
Determinants of effective capacity
Facilities (size, layout, transportation) Product and service factors (non-uniformity of output, product mix) Process Factors (productivity, quality) Human factors (Tasks, skills, turnover) Policy (Overtime) Operational (Materials, Breakdowns) Supply chain (Distributors) External (Regulations)
Bottleneck operation
an operation whose capacity is lower than other operations in a sequence.
What determines service capacity?
The need to be near customers
Degree of demand volatility
The inability to store services
Capacity cushion/ safety capacity
Extra capacity used to offset demand uncertainty
Capacity cushion equation
Capacity - expected demand
Demand Management Strategies
Strategies to shift demand from peak periods to slower periods.
How to calculate processing requirements
Add up total processing time for each product.
Economies of scale
If output rate is less than optimal level, increasing the output rate results in decrease average unit costs.
Diseconomies of scale
If output rate is more than optimal level, increasing the output rate results in increasing average unit costs.
What problems might diseconomies of scale cause?
Congestion (transportation)
Complexity
Inflexibility
Additional levels of management
Break Even Point
Fixed Costs/(Rev-Variable cost)
Indifference point
The quantity at which two competing alternatives would be the same.
Process Selection
decides the way production of goods or services will be organized
What drives Process Choice?
demand:
- variety (how much)
- volume (expected output)
- flexibility
Implications of Process Selection
Capacity planning
Layout of facilities
Equipment
Design of work systems
Job Shop
small scale, highly customized
ie. eye glasses
Batch Processing
Moderate volume, high flexibility
ie. bakery
Assembly Line
high volume, high standardization
Continuous
high volume of non-discrete goods (gasoline)
Product-Process Matrix
variety (x) v volume (y)
diagonal represents ideal match
above diagonal –> opportunity costs
below diagonal –> out of pocket costs
Project
used for work that is none routine with a unique set of objective to be accomplished in a limited time frame
ie. plays, movies
Product/Service Profiling
Linking key product/service requirements to process capabilities
Layout
the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system
Layout Design Objectives
Facilitate a smooth flow of work, material, and information through the system
Product Layout
Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow
Process Layout
Layout that can handle varied processing requirements
-intermittent processing, job shop, batch
Fixed Position Layout
Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed
Designing process layouts
- -A list of work stations (departments) to be arranged and their dimensions
- -A projection of future work flows between the pairs of work centers
- -The distance between locations - and the cost per unit of distance to move loads between them
- -The amount of money to be invested in the layout
- -A list of any special considerations
- -The location of key utilities, access and exit points
Heuristic for process layout
Assign departments with the greatest interdepartmental work flow first -> to locations that are closet to each other
Muther’s Grid
- considers multiple qualitative criteria
- Indicates the relative importance of each combination of department pairs.
Computerized Layout Solutions
CRAFT, CORELAP, PROMODEL and EXTEND, THREE-D MODELING and CAD
Process Layout Advantages
- Can handle a variety of processing requirements
- Not vulnerable to equipment failures
- General-purpose equipment is cheaper
Process Layout Disadvantages
- routing and scheduling
- equipment utilization is low
- material handling is slow
- complicates supervision
- special attention needed for each product
- accounting, inventory control, and purchasing more complex
Bottleneck Operation
An operation in a sequence of operations whose capacity is lower than that of the other operations
Line Balancing
The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements
Precedence Diagram
A diagram that shows elemental tasks and their precedence requirements
Cycle Time
The maximum time allowed at each workstation to complete its set of tasks on a unit
Minimum Cycle Time = longest task time
Maximum Cycle time = Σt = sum of task time
Heuristics to assigning tasks to workstations
- Assign tasks in order of most following tasks
- Assign tasks in order of greatest positional weight
Balance Delay
% of idle time of a line
Efficiency
% of busy time of a line
