SMG OM 323 Chapter Notes - Chapter Ch.5: Theory Of Constraints, Fixed Cost, My5
4 Feb 2017
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Om323 strategic capacity planning for products and. 5. 1 intro: capacity is the upper limit or ceiling on the load that an operating unit can handle. The load might be in terms of the number of physical units produced. Goal: to achieve a match between the long-term supply capabilities of an organization and the predicted level of long-term demand. Capacity often refers to an upper limit on the rate of output. Design capacity: the maximum output rate or service capacity an operation, process, or facility is designed for. Effective capacity: design capacity minus allowances such as personal time, and maintenance. Capacity utilization is the ratio of actual output to design capacity. 3 primary strategies are leading, following and tracking. Leading = builds capacity in anticipation of future demand increases. Following = builds capacity when demand exceeds current capacity. Tracking = similar to following strategy, but it adds capacity in relatively small increment to keep pace with increasing demand.
