Utilization and Inventory Backlog

Question 1

UTILIZATION OF A RESOURCE

Answer 1

Throughput Rate / Capacity Rate X 100

Answer is a percentage

Question 2

IMPLIED UTILIZATION FORMULA

Answer 2

Input Rate (Process) / Capacity Rate (Resource)

Question 3

IMPLIED UTILIZATION

Answer 3

Measures how much more demand exists compared to the system’s available capacity. It shows whether the system is under pressure to handle more work than it can produce in a given time. Express as a percentage

Question 4

SUPPLY-DEMAND MISMATCH

Answer 4

Maybe overtime work is needed

Question 5

WHAT ARE THE NEGATIVE IMPLICATION OF EXCESS DEMAND

Answer 5

Customer Dissatisfaction: Unmet demand leads to delays, lost sales, and unhappy customers.
Backlogs: Orders pile up, increasing wait times and operational pressure.
Lost Revenue: Missed opportunities to fulfill demand result in reduced profits.
Strained Resources: Overworked employees or machines can lead to burnout or breakdowns.
Reputation Damage: Persistent shortages can harm the company’s brand image.

Question 6

POSITIVE IMPLICATION OF EXCESS DEMAND

Answer 6

Can try increase capacity, outsource, how much to produce

Question 7

MULTIPLE FLOW UNITS

Answer 7

More than one type of product, service, or item flows through the same system simultaneously.