SCM 303 Lecture Notes - Lecture 11: Outsourcing
Document Summary
What is capacity planning: capacity: the ability to hold, receive, store, or accommodate, capacity planning: approach for determining the overall capacity level of capital intensive resources, including facilities, equipment, and size of the overall labor force. Capacity ratings: design (or engineered or purchased) capacity. Available capacity: design capacity minus lost units. Actual capacity: available capacity minus inefficiencies. Capacity measures: capacity utilization %: (actual output/design capacity) x 100, efficiency %: (actual output/actual capacity) x100. Small chunk vs. big chunk strategies: small chunk: adding things in small amounts, big chunk: having to add things in large quantities. Always better off adding things in small chunks, but only if you can: harley davidson added a big chunk (in this case, a new manufacturing plant that they are still regretting today, demand dropped) Determining requirements: forecast sales for each individual product or service, calculate equipment and labor requirements to meet the forecasts, develop and evaluate capacity alternatives.
