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BUSI 2301 (13)
Chapter 5

CHAPTER 5.docx

3 Pages
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Department
Business
Course Code
BUSI 2301
Professor
Inder S Mann

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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 reality • Actual output • Efficiency: actual output/effective cap • Utilization: actual output/ design cap C. Factors Influencing Capacity a. Facilities b. Products or services c. Human d. Planning and operational e. External • 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
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