BUSI 2301 Lecture 4: Chapter 5 Operations
Document Summary
Capacity is the upper limit on the load that an operating unit can handle: the basic questions in capacity handling are: How much is needed? (how much of that is actually needed) When is it needed? (part of the year, throughout the year: the main objective is to match the capacity with future demand for the products, strategic capacity planning refers to long-term capacity decisions (e. g. , equipment, machines, size). Decisions related to design. (eg starbucks, have 2 express machines) Impacts ability to meet the organization future demands. 1: affects operating costs, major determinant of initial capital costs. Typically the greater the capacity of a productive unit the greater its capital cost. Involves long-term commitment of resources; once they are implemented, it may be difficult to modify those decisions without incurring major costs. (plan the right way the first way: capacity can affect competitiveness. If a firm has excess capacity, or can.
