MAN 4504 Lecture Notes - Lecture 10: Capacity Management, Operations Management, Fixed Cost

• School: University of Florida
• Department: Management
• Course: MAN 4504
• Professor: Munson Adam B.

Document Summary

To build a production process that meets customer requirements & product specifications w/i cost & other managerial constraints. The throughput or number of units a facility can hold/receive/store/produce in a certain period of time. Design capacity it the max theoretical output of a system. Effective capacity is the capacity a firm expects to achieve given current operating constraints. Utilization is the % of design capacity achieved. Efficiency is the % of effective capacity achieved. Capacity decisions impact all 10 decisions of operations management as well as other functional areas of organization. Capacity decisions must be integrated into the organization"s mission & strategy. > curtail demand by raising prices & scheduling longer lead. > produce products that cater to different seasons/patterns. Tactics for matching capacity to demand: making staff changes, adjusting equipment. > sell or lease out existing equipment: improving processes to increase throughput, redesigning products to facilitate more throughput, adding process flexibility to meet changing product preferences, closing facilities.