MOB Capacity Planning Flashcards
What is Capacity?
Capacity is the ability to archive, store, or produce.
What is capacity planning?
Capacity planning refers to the determining of production capacity a company needs to meet the changing demands of its products and services
What does the term Strategic Capacity Planning refer to?
Strategic Capacity Planning refers to the technique used to identify and measure the overall capacity of production
Why is Strategic Capacity Planning needed?
- Helps keep operating costs at minimum level without affecting quality
- Helps organization keep a competitive edge and achieve long term growth
- Helps the organization meet its future requirements
What does the term Design Capacity refer to?
Design Capacity refers to the maximum output achieved under ideal working conditions
What does the term Production Capacity refer to?
Production Capacity refers to the maximum output achieved under normal working conditions
What does the term Sustainable Capacity refer to?
Sustainable Capacity refers to the maximum output achieved under realistic working conditions
What does the term Effective Capacity refer to?
Effective Capacity refers to the maximum output achieved under pre-defined working conditions
What is the Effective Capacity formula?
Actual output - design capacity
Then
Actual efficiency rate output/Effective Capacity
What is the capacity utilization formula?
Actual output/Design Capacity
How to Capacity Utilization?
- Increased Marketing
- Rationalization
- Subcontracting
- Redeployment
What are some advantages of operating at full capacity?
- Average costs will be minimized because fixed cost will be spread across the units of output
- Workers will be motivated as they feel more secure in there job
- A busy operation can improve thee company’s image
What are some disadvantages of operating at full capacity?
- Strain on resources
- Rigid/No flexibility
- Insufficient time for training
