Презентация «Capacity Planning»

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Topic 4. Capacity Planning Lecturer: Nazarov Nikita Constantinovich

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Structure of topic

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Manufacturing System Manufacturing systems produce standardized products in large volumes. finite capacity contribute fixed costs variable costs are added as labour productivity is measurable …

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Service Systems Service systems present more uncertainty with respect to both capacity and costs. services are produced and consumed in the presence of the customer services must be sufficiently …

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Capacity definition Capacity is the maximum output rate of a production or service facility Capacity = (number of machines or workers)*(number of shifts)*(utilization)*(efficiency) The basic …

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Measures of capacity Capacity can be difficult to quantify due to … – Day-to-day uncertainties such as employee absences, equipment breakdowns, and material-delivery delays – Products and services …

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Measures of capacity

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Importance of Capacity Decisions Impacts ability to meet future demands Affects operating costs Major determinant of initial costs Involves long-term commitment Affects competitiveness Affects ease …

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Relationship between Capacity and Output

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Various Capacities Designed capacity of a facility is the planned or engineered rate of output of goods or services under normal or full scale operating conditions. = maximum obtainable output …

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Efficiency and Utilization

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

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Capacity Management Goal The objective of capacity management (i. e. planning and control of capacity) is to match the level of operations to the level of demand.

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Capacity Planning Capacity planning is the process used to determine how much capacity is needed (and when) in order to manufacture greater product or begin production of a new product.

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Three Steps for Capacity Planning Determine Service Level Requirements Analyze Current Capacity Planning for the future

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How Much Capacity Is Best? The Best Operating Level is the output than results in the lowest average unit cost Economies of Scale: – Where the cost per unit of output drops as volume of output …

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Best Operating Level

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Evaluating Alternatives

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Evaluating Alternatives

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Cost-Volume Relationships

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Break-Even Problem

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Assumptions of Cost-Volume Analysis One product is involved Everything produced can be sold Variable cost per unit is the same regardless of volume Fixed costs do not change with volume Revenue per …

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Evaluating Capacity Alternatives Cost-Volume Formulas TC=FC+(VCxQ) TR=RxQ P=TR–TC P=(RXQ)–[FC+(VCXQ)] Volume=(SP+FC)/(R-VC) QBEP=FC/(R-VC)

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Process of Capacity Planning Capacity planning is concerned with defining the long-term and the short-term capacity needs of an organisation and determining how those needs will be satisfied. …

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Long-term capacity strategies Long-term capacity requirements are: are more difficult to determine are dependent on marketing plans, product development and life-cycle of the product. is concerned …

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Long-range Capacity Decisions Multiple products: Company’s produce more than one product using the same facilities in order to increase the profit. Phasing in capacity: In high technology industries, …

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Short-term capacity strategies Managers looking ahead up to 12 months Fundamental capacity is fixed. Many short-term adjustments for increasing or decreasing capacity are possible Capital-intensive …

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Types of Short-term Capacity Strategies Inventories: Stock finished goods during slack periods to meet the demand during peak period. Backlog: During peak periods, the willing customers are requested …

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