MGMT 3230 Lecture Notes - Oil Refinery, Payback Period, Capacity Planning
30 Jun 2020
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** upper limit on the load that an operating unit can handle. **systematic = determination of facility and major machine/equipment requirements to meet long-term demand for goods and services. **overcapacity = causes operating costs that are too high, while under capacity causes strained resources and possible loss of customers. Can be problematic bc you"re wasting 11409$ Rationalist says give me a smaller glass bc it"ll be full. Importance of long-term capacity = need a plan to manage demand. Globalization increases complexity and requires substantial resources. Max. obtainable output rate under ideal conditions. Max. output rate given work breaks, product mix, scheduling difficulties, equipment, delays, and other realities [ex. **efficiency = the ratio of actual output rate to effective capacity. **utilization = unit of resource during a period. Bushels of grain per acres per year, litres of milk per day. Square metres of floor space, sales per sq. ft. Design capacity for 1 week = 42,000.
