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Capacity Planning For Products and Services

Capacity Planning. CapacityThe upper limit or ceiling on the load that an operating unit can handleCapacity needs includeEquipmentSpaceEmployee skills. Strategic Capacity Planning. GoalTo achieve a match between the long-term supply capabilities of an organization and the predicted level of lo

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Capacity Planning For Products and Services

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    1. Chapter 5 Capacity Planning For Products and Services

    2. Capacity Planning

    3. Strategic Capacity Planning

    4. Strategic Capacity Planning

    5. Impacts ability to meet future demands Affects operating costs Major determinant of initial costs Involves long-term commitment Affects competitiveness Affects ease of management Globalization adds complexity Impacts long range planning Importance of Capacity Decisions

    6. Capacity Design capacity maximum output rate or service capacity an operation, process, or facility is designed for Effective capacity Design capacity minus allowances such as personal time, maintenance, and scrap Actual output rate of output actually achieved--cannot exceed effective capacity.

    7. Efficiency and Utilization

    8. Actual output = 36 units/day Efficiency = = 90% Effective capacity 40 units/ day Utilization = Actual output = 36 units/day = 72% Design capacity 50 units/day Efficiency/Utilization Example

    9. Determinants of Effective Capacity Facilities Product and service factors Process factors Human factors Operational factors Supply chain factors External factors

    10. Strategy Formulation Capacity strategy for long-term demand Demand patterns Growth rate and variability Facilities Cost of building and operating Technological changes Rate and direction of technology changes Behavior of competitors Availability of capital and other inputs

    11. Capacity Strategies

    12. Strategy Formulation

    13. Capacity Cushion

    14. Steps for Capacity Planning Estimate future capacity requirements Evaluate existing capacity Identify alternatives Conduct financial analysis Assess key qualitative issues Select one alternative Implement alternative chosen Monitor results

    15. Calculating Capacity Requirements

    16. Calculating Processing/Capacity Requirements

    17. Service Capacity Planning

    18. Demand Management Strategies

    19. In-house or Outsource?

    20. Developing Capacity Alternatives

    21. Economies of Scale

    22. Diseconomies of Scale

    23. Evaluating Alternatives

    24. Constraint Management

    25. Resolving Constraint Issues

    26. Evaluating Alternatives

    27. Cost-Volume Analysis

    28. Break-Even Point (BEP)

    29. Cost-Volume Relationships

    30. Cost-Volume Relationships

    31. Cost-Volume Relationships

    32. Assumptions of Cost-Volume Analysis

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