...Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its product. In the context of capacity planning, design capacity is the maximum amount of work that an organization is capable of completing in a given period. Effective capacity is the maximum amount of work that an organization is capable of completing in a given period due to constraints such as quality problems, delays, material handling, etc. The phrase is also used in business computing as a synonym for capacity management. There are four procedures for capacity planning; capacity planning using overall factors (CPOF) capacity bills, resource profiles, and capacity requirements planning (CRP). The first three are rough-cut approaches (involving analysis to identify potential bottlenecks) that can be used with or without manufacturing resource planning (MRP) systems. CRP is used in conjunction with MRP systems. Capacity using overall factors is a simple, manual approach to capacity planning that is based on the master production schedule and production standards that convert required units of finished goods into historical loads on each work center. Bills of capacity is a procedure based on the MPS. Instead of using historical ratios, however, it utilizes the bills of material and routing sheet (which shows the sequence or work centers required to manufacture the part, as well as the setup and run time). Capacity requirements can then be determined...
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...CAPACITY PLANNING BECK MANUFACTURING AND PLANT CAPACITY BUS644: OPERATIONS MANAGEMENT KIMBERLY JOHNSON ASHFORD UNIVERSITY MICHAEL SNELL FEBRUARY 3, 2014 Capacity planning is a process used to determine production capacity needed by the organization to meet demands for its products. Capacity can be defined as the measurement of the organization’s ability to provide the demand for services or goods requested in a timely manner. Capacity may also be defined as the maximum rate of production. The decisions of management can affect capacity. Most decisions that affect capacity are increases in time and the quality of preventive maintenance which may increase capacity by reducing unexpected equipment failure and changing production rate. Capacity decisions are critical to the organization’s success because they allocate significant resources to assets that usually cannot be changed easily or economically. Capacity decision is based on the best estimate of the future and should be made so that as much flexibility as possible can be retained. If capacity is not obtain in the proper amount, too much capacity can mean that the organization invested in resources where not needed but if capacity is too small, potential sales and market share are lost. Capacity is the maximum amount of work that the organization is capable of completing in any given period. Effective capacity is the maximum amount of work the organization is capable of completing in a period...
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...Submitted to: Dr. Maria Monica Costales University of the Cordilleras, 2nd Trimester SY 2013-14 8 November 2013 Capacity Planning Techniques A. Determining Capacity Requirements In determining capacity requirements, we must address the demands for individual product lines, individual plant capacities, and allocation of production throughout the plant network. Typically this is done according to the following steps: 1. Use forecasting techniques to forecast sales for individual products within each product line. 2. Calculate equipment and labor requirements to meet product line forecasts. 3. Project labor and equipment availabilities over the planning horizon. Often the firm then decides on some capacity cushions that will be maintained between the projected requirements and the actual capacity. A capacity cushion is an amount in excess of the expected demand. Positive Capacity Cushion: If the expected annual demand on a facility is $10 million in products per year and the design capacity is $12 million per year, it has a 20% capacity cushion (2/10). A 20% capacity cushion equates to an 83% utilization rate (100%/120%). Negative Capacity Cushion: when a firm’s design capacity is less than the capacity to meet its demand. If a firm has a demand of $12million in product per year but can only produce $10million per year, it has a negative capacity cushion of 20 %. Problem 1.Amiel’sCompany produces two flavors of salad dressings: Ranch and Ceasars. Each is available...
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...CAPACITY PLANNING Measures of Capacity. No single capacity measure is applicable to all types of situations. Hospitals measure capacity as the number of patients that can be treated per day; a retailer measures capacity as annual sales dollars generated per square foot; an airline measures capacity as available seat-miles (ASMs) per month; a theater measures capacity number of seats; and a job shop measures capacity as number of machine hours. In general, capacity can be expressed in one of two ways: output measures or input measures. Output measures are the usual choice for facilities that produce standard products in high volumes, in a limited number of models using production processes with rigid flow patterns. Nissan Motor Company states capacity at its Tennessee plant to be 450,000 vehicles per year. The plant produces only one type of vehicle, making capacity easy to measure. However, the Navistar plant in Springfield Ohio produces vehicles that range from heavy-duty trucks to school busses. The inherent variation in production time requirements makes a single figure for capacity much less meaningful. Input measures are the usual choice for facilities that produce custom products in low volumes using processes with flexible flow patterns. For example, in a photocopy shop, capacity can be measured in machine hours or number of machines. Demand, which invariably is expressed as output rate, must be converted to an input measure. Only after making the...
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...Capacity Building Versus Capacity Development in Healthcare Soumya Vyas Student, Institute of Health Management Research, Jaipur, India Capacity building is not a new concept in healthcare. Every innovation has been evidently supported by Capacity Building to establish effective healthcare systems. The term was improvised by UNDP in 1991 as Community Capacity Building which gave its application in three levels namely individual, institutional and societal. This concept immediately brings to mind ideas like training, financial or technical aid, etc. Although it has been an essential and effective approach, there is possible scope for betterment using Capacity Development. It can be explained as the process of obtaining, strengthening and maintaining the capabilities at all the three levels to set and achieve their own development objectives over time. Although the distinction between the two is minute, the adaption of the latter where necessary can bring about considerable change and effect. Development zooms in on the exiting features than can be transformed into capabilities. Instead of introduction of the lacking, capacity development helps realise an alternate route to the same objective using unrelated but pre-existing features. The study will elaborate on the example of such from the healthcare field explaining how new measures can be evolved to realise basic goals. One of the most profound issues in healthcare in India is the budget crunch and Capacity Development can...
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...1. Explain the challenge Elizabeth faced in meeting her capacity needs and what she should have considered before moving into the larger facility. Capacity is the maximum output rate that a facility achieves. Planning for capacity needs is essential to the successful operation of a facility for a company. Elizabeth faced challenges because there was no capacity planning, which involves the process of establishing the output rate that can be achieved by a facility. (Reid & Sanders, 2010, pg. 316) If there is no careful planning, there may not be enough output capability to meet customer demands or that there could be too much capacity sitting idle. If a company wants to grow and take full advantage of demand, capacity should be carefully planned. (Reid & Sanders, 2010, pg. 317) A lot of capacity planning and demands relies heavily upon customer demand and knowing how to meet those demands. For example There are several needs that are part of capacity planning that Elizabeth should have considered before making the move to a larger facility. The first that should have been determining the market need of the community. Determining the amount of baked goods that would be sold would have helped her understand the space necessary for purchase. After determining the market need, research on the premises, location, prices, and other pertinent information should be obtained to ensure that the proper capacity is used for the physical premises of Biddy’s Bakery. 2. Determine...
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...Strategic Capacity Planning Learning Objective: You should be able to: 1. Summarize the importance of capacity planning 2. Discuss ways of defining and measuring capacity 3. Describe the determinants of effective capacity 4. Discuss the major considerations related to developing capacity alternatives 5. Briefly describe approaches that are useful for evaluating capacity alternatives Capacity Planning Capacity 1. The upper limit or ceiling on the load that an operating unit can handle 2. Capacity needs include Equipment Space Employee skills Capacity Planning Questions Key Questions: 1. What kind of capacity is needed? 2. How much is needed to match demand? 3. When is it needed? Related Questions: 1. How much will it cost? 2. What are the potential benefits and risks? 3. Are there sustainability issues? 4. Should capacity be changed all at once, or through several smaller changes 5. Can the supply chain handle the necessary changes? 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. Defining and Measuring Capacity Measure capacity in units that do not require updating Why is measuring capacity in dollars problematic? Two useful definitions of capacity Design...
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...Capacity Planning Capacity planning has seen an increased emphasis due to the financial benefits of the efficient use of capacity plans within material requirements planning systems and other information systems. Insufficient capacity can quickly lead to deteriorating delivery performance, unnecessarily increase work-in-process, and frustrate sales personnel and those in manufacturing. However, excess capacity can costly and unnecessary. The inability to properly manage capacity can be a barrier to the achievement of maximum firm performance. In addition, capacity is an important factor in the organization’s choice of technology. Capacity is usually assumed to mean the maximum rate which a transformation system produces or processes inputs. Sometimes this rate may actually be “all at once”; for instance the capacity of an airplane. A more usable definition of capacity would be the volume of output elapsed time and the production capacity of a facility. Capacity planning is the process used to determine how much capacity is needed (and when) in order to manufacture greater products or begin production of a new product. A number of factors can affect capacity: the number of workers, the number of machines, waste, scrap, defects, errors, productivity, suppliers, government regulations and preventive maintenance. Capacity planning is relevant in both the long term and the short term. However, there are different issues at stake for each. Long Term Capacity Planning Over the long...
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...determine how to properly evaluate the situation and decide if there is enough room at the current building to properly service existing members or to open a larger facility in another location. Existing operations Management needs specific information to estimate how well the existing capacity of the building is being utilized by members and to decide the capacity utilization rate of the club to reveal if they are utilizing their space efficiently. Fitness Plus knows their most popular activities are in the following areas: 1) Aerobics room accommodates 35 people per class; 30% of members use. 2) Free weight room; 20% of members use. 3) 24-piece Nautilus equipment room; 25% of members use. 4) Cardiovascular room containing 29 pieces of equipment (9 stair-steppers, 6 treadmills, 6 life-cycle bikes, 3 air-dyne bikes, 2 cross-aerobic machines, 2 rowing machines, and one climber); 40% of members use. Also there is space for 8 racquetball courts, which 15% of members use, and 6 tennis courts, which 10% of members use. Analyzing growth In five year’s time, growth went up 2 times during peak hours, and 1-½ times during slow hours. Growth has gone up 1-2/3 times overall. Fitness Plus Capacity 3 1992 660 hours open during week Slow time – average 6-8 people/hour Peak – average 40 people/hour 9,990 people working out/week (15 people per hour average/open hours) 1997 660 hours open during week Slow time – average 10 people/hour Peak – average 80 people/hour 16,500 people...
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...Michael Greenberg Macroeconomic Policy 10/15/2013 Capacity Utilization of China For a long time, we have suggested that because of China’s GDP growth being driven primarily by investment, the end result will inevitably be over-capacity. This has been rather apparent in some industries such as steel, cement and wind power. We also believe that the construction boom after the 2008/09 stimulus has already led to over-building of residential real estate. The only problem we all have is that there are no accurate official statistics in China (like those in the US) that we are aware of for capacity utilization. With investment increasing by 5 percent of GDP over the past three years, estimates show that capacity utilization has declined from just under 80 percent before the crisis to around 60 percent today. This low rate of capacity utilization, together with continued low core inflation, suggests that there is large excess capacity in China’s economy. The estimates also show that China has had excess capacity for the better part of the past decade. The gap was closing in the run-up to the financial crisis, but did so based on an unsustainable level of external demand. Even in 2007, when growth exceeded 14 percent, nonfood inflation was low and stable, suggesting the economy was still operating below capacity. Then, in 2008, the government put in place a large investment stimulus that increased growth and broadened capacity in a range of areas. Filtering techniques which impose...
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...Strategic Capacity Management - Operations Management Review Notes Capacity is the ability to hold, receive, store, or accommodate. In a business sense, it is viewed as the amount of output that a system is capable of achieving over a specific period of time. Strategic capacity planning has as its objective, to determine the overall capacity level of capital-intensive resources - facilities, equipment, and overall labor force size - that best supports the company's long-range competitive strategy. Capacity utilization rate = Capacity used Best operating level Capacity used – rate of output actually achieved Best operating level – capacity for which the process was designed Economies of scale Signifies that as production volumes increase, the average cost per unit decreases. The experience curve As plants produce more units, they gain experience in their production methods, which in turn, results in reducing the per unit costs of production in a predictable manner. Capacity flexibility Capacity flexibility means having the ability to rapidly increase or decrease production levels or to shift production capacity quickly from one product or service to another. Such flexibility is achieved through flexible plants, processes, and workers, as well as through strategies that use the capacity of other operations. Issues to be considered in adding capacity are: -maintaining system balance -frequency of capacity additions -the use of external...
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...The rapid increase of population is very threatening to the limited carrying capacity of our earth. Our ecological footprint already disastrous will become much more detrimental with the staggering population growth.1 Our ecological footprint is largely comprised of three main elements of consumption: food, wood, and land. However, components such as energy consumption also need to be accounted for.2 Food availability, to a great extent, determines the carrying capacity for every population of species. The growth of industrial agriculture has caused a tremendous increase in food production around the world.3 Be that as it may, these practises consist of mechanization and fertilization both of which are dependent on petroleum. The United States uses 12% of its oil intake on food production alone. As the amount of oil in the world begins to decrease, so will the production of food.4 As Thomas Robert Malthus quotes in his An Essay on the Principle of population, “... the power of population is indefinitely greater than the power in the earth to produce subsistence for man.” 5 Malthus explains that the production of food cannot keep up with the rapidly increasing population.6 Wood consumption includes all the paper, packaging, wood furniture and firewood that we use day after day. 7 This part of the ecological footprint also needs to include the wood products that an individual uses in the systems and organizations that support them. Today, the world’s consumption of ...
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...Impact assessment of capacity building and training: assessment framework and two case studies Jenny Gordon and Kevin Chadwick Centre for International Economics, Canberra February 2007 The Australian Centre for International Agricultural Research (ACIAR) operates as part of Australia’s international development cooperation program, with a mission to achieve more-productive and sustainable agricultural systems, for the benefit of developing countries and Australia. It commissions collaborative research between Australian and developing-country researchers in areas where Australia has special research competence. It also administers Australia’s contribution to the International Agricultural Research Centres. ACIAR seeks to ensure that the outputs of its funded research are adopted by farmers, policy makers, quarantine officers and other beneficiaries. In order to monitor the effects of its projects, ACIAR commissions independent assessments of selected projects. This series reports the results of these independent studies. Communications regarding any aspects of this series should be directed to: The Research Program Manager Policy Linkages and Impact Assessment Program ACIAR GPO Box 1571 Canberra ACT 2601 Australia tel +612 62170500 email © Australian Centre for International Agricultural Research GPO Box 1571, Canberra ACT 2601 Gordon, J. and Chadwick, K. Impact assessment of capacity building and training: assessment framework and two case studies. Impact Assessment...
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...Influencing the Capacity Credit of WECS- A Simplified Approach Sushil Patil, Student Member, IEEE, and R. Ramakumar, Life Fellow, IEEE Abstract--In recent years, penetration of wind generated electricity into power grids has been increasing significantly. During the last few decades, wind energy has doubled in capacity every three years. Because of the intermittent characteristics of wind power, it is usually difficult to determine an acceptable penetration level to maintain specific reliability requirements. The need for better capacity credit assessment for wind electric conversion systems is clear. Considerable work has been done in the past to estimate the capacity credit of WECS (wind electric conversion system) and several approaches have been proposed. This paper examines the influence of different parameters on the Capacity Credit using a simplified approach based on an effective forced outage rate (FOR) for WECS. The parameters considered are penetration level, amount and variability of load, generation configuration and wind regimes. Index Terms— Capacity Credit, Wind Electric Conversion System, Annual Load Duration Curve, Wind Penetration, Generation Configuration Electric power systems must have sufficient reserves so that generation is always adequate to meet varying customer demand. Because electricity demand cannot be known in advance with certainty, and also because generators, transmission lines and distribution systems can experience forced outages, a capacity margin...
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...What happens as you keep everything else constant and increase carrying capacity, K? Decrease K? Sketch plots of your results. Increasing carrying capacity K and keeping everything else at a constant rate leads to an increase of the slope which displays that the population will increase and reach the carrying capacity. By decreasing carrying capacity, K and keeping everything else constant gradually decreases the slope that leads to a decrease in the population. 2A. What happens as you increase population growth rate, r, while keeping carrying capacity steady. Decrease r? Sketch your results. By increasing the population growth rate, r, while keeping carrying capacity steady, leads the population to grow faster. By decreasing...
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