Chapter 5 - Strategic capacity planning for products and services. In this chapter you should be able to: Name the three key questions in capacity planning, explain the importance of capacity planning, describe ways of defining and measuring capacity,. | Strategic Capacity Planning for Products and Services Chapter 5 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. You should be able to: LO Name the three key questions in capacity planning LO Explain the importance of capacity planning LO Describe ways of defining and measuring capacity LO Name several determinants of effective capacity LO Discuss factors to consider when deciding whether to operate in-house or outsource LO Discuss the major considerations related to developing capacity alternatives LO Describe the steps that are used to resolve constraint issues LO Briefly describe approaches that are useful for evaluating capacity alternatives Learning Objective: Chapter 5 Capacity The upper limit or ceiling on the load that an operating unit can handle Capacity needs include Equipment Space Employee skills Capacity Planning LO Key Questions: . | Strategic Capacity Planning for Products and Services Chapter 5 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. You should be able to: LO Name the three key questions in capacity planning LO Explain the importance of capacity planning LO Describe ways of defining and measuring capacity LO Name several determinants of effective capacity LO Discuss factors to consider when deciding whether to operate in-house or outsource LO Discuss the major considerations related to developing capacity alternatives LO Describe the steps that are used to resolve constraint issues LO Briefly describe approaches that are useful for evaluating capacity alternatives Learning Objective: Chapter 5 Capacity The upper limit or ceiling on the load that an operating unit can handle Capacity needs include Equipment Space Employee skills Capacity Planning LO Key Questions: What kind of capacity is needed? How much is needed to match demand? When is it needed? Related Questions: How much will it cost? What are the potential benefits and risks? Are there sustainability issues? Should capacity be changed all at once, or through several smaller changes Can the supply chain handle the necessary changes? Capacity Planning Questions LO Capacity decisions impact the ability of the organization to meet future demands affect operating costs are a major determinant of initial cost often involve long-term commitment of resources can affect competitiveness affect the ease of management have become more important and complex due to globalization need to be planned for in advance due to their consumption of financial and other resources Capacity Decisions Are Strategic LO Measure capacity in units that do not require updating Why is measuring capacity in dollars problematic? Two useful definitions of capacity Design capacity The maximum output rate or service .
