CHAPTER 5: Strategic Capacity Planning
A. What is capacity?
• Upper limit or ceiling on an operating unit
• 3 basic qs
o What kind?
o How much?
o When needed?
B. Measuring capacity
• Design capacity: max output
• Effective capacity: max cap given product mix, sched difficulties and other doses of
• Actual output
• Efficiency: actual output/effective cap
• Utilization: actual output/ design cap
C. Factors Influencing Capacity
b. Products or services
d. Planning and operational
• Planning process
o Forecast demand one to five years ahead
o Determine capacity req’m
o Measure the cap now and decide how to bridge the gap D. Developing Capacity Alts
1. Design flexibility into systems
2. Differentiate b2 new and mature products and s