08 KEY Takeaways Capacity Planning PDF

Preview

Summary

Download 08 KEY Takeaways Capacity Planning PDF

Description

OPERATIONS MANAGEMENT I (ADE) Prof. Carlos Alonso-Perez KEY TAKEAWAYS CAPACITY CONCEPTS AND PLANNING * Concepts of Capacity - Design (or Notional) Capacity: Maximum theoretical production of a given system in a given period of time under ideal conditions - Effective Capacity: Expected maximum real production of a system in a given period of time, considering its actual operating limitations (in %) - Effective Capacity < Notional Capacity (typically around 80-90%) * Performance Parameters - Utilization: Percentage actually reached over the Notional Capacity Utilization: Real Output / Design Capacity - Efficiency: Percentage actually reached over Effective Capacity Efficiency: Real Output / Effective Capacity * Capacity Policy - Conservative: Demand is in excess of Capacity - Expansionist: Capacity is in excess of Demand - Incremental: Capacity is gradually expanded - Unique: All capacity required is installed at once without further increases * Numerical techniques to make decisions on Capacity: - Decision Trees (assigning weights to the various factors and scenarios). Suited when there is uncertainty in boundary conditions. Based on a subjective approach - Linear Equations: When we know the fixed and variable costs for the various scenarios and the maximum production allowed in each of them (we use the lowest equation in every segment of demand). Based on an objective approach - NPV (Net Present Value) Approach...