Chapter 5 entitled 'Strategic capacity planning for products and services' explains the importance of capacity planning, discusses ways of defining and measuring capacity, describes determinants of effective capacity, discusses major considerations related to developing capacity alternatives, and briefly describes approaches that are useful for evaluating capacity alternatives. | Strategic Capacity Planning for Products and Services McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. You should be able to: Summarize the importance of capacity planning Discuss ways of defining and measuring capacity Describe the determinants of effective capacity Discuss the major considerations related to developing capacity alternatives Briefly describe approaches that are useful for evaluating capacity alternatives 5- Student Slides Capacity The upper limit or ceiling on the load that an operating unit can handle Capacity needs include Equipment Space Employee skills Student Slides 5- 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? . | Strategic Capacity Planning for Products and Services McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. You should be able to: Summarize the importance of capacity planning Discuss ways of defining and measuring capacity Describe the determinants of effective capacity Discuss the major considerations related to developing capacity alternatives Briefly describe approaches that are useful for evaluating capacity alternatives 5- Student Slides Capacity The upper limit or ceiling on the load that an operating unit can handle Capacity needs include Equipment Space Employee skills Student Slides 5- 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? Student Slides 5- 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. 5- Student Slides 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 capacity an operation, process, or facility is designed for Effective capacity Design capacity minus allowances such as personal time and maintenance 5- Student Slides Actual output The rate of output actually achieved It cannot exceed effective capacity Efficiency Utilization Measured as percentages 5- Student Slides Estimate future capacity requirements Evaluate existing capacity and facilities; identify gaps Identify alternatives for meeting requirements Conduct .
