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How Can Erp and Mrp Be Used in the Service Industry?

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Unit 8 Alternative Assignment
Felicia Brantley
MT435 Operations Management

Capacity is the ability of an operation to perform and produce. Capacity can be quantified by using efficiency and utilization measures. Over capacity resources means staff and machines are not being fully utilized and not operating at full capacity. Under capacity means customer demand is greater than the supply the organization can fulfill. Forecasting demand can be complex and unreliable in an uncertain environment. There needs to be balance between capacity planning and meeting customer demand. If an organization does not manage its operations effectively it may be tying up money unnecessarily. Organizations must have the flexibility to extend and contract their supply when frequent or volatile changes in demand occur.
Strategies for Adjusting Capacity * Level production * Producing at a constant rate and using inventory to absorb fluctuations in demand * Chase demand * Hiring and firing workers to match demand * Peak demand * Maintaining resources for high-demand levels * Overtime and under-time * Increasing or decreasing working hours * Subcontracting * Let outside companies complete the work * Part-time workers * Hiring part time workers to complete the work * Backordering * Providing the service or product at a later time period
Strategies for Managing Demand * Shifting demand into other time periods * Incentives * Sales promotions * Advertising campaigns * Offering products or services with counter-cyclical demand patterns * Partnering with suppliers to reduce information distortion along the supply chain
Aggregate Planning * Determine the resource capacity needed to meet demand over an intermediate time horizon * Aggregate refers to product lines or

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