BU385 Chapter Notes - Chapter 5: Indian Railways, Demand Forecasting, Net Present Value
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Lo1: capacity, measures, efficiency, utilization and effective capacity. Capacity- upper limit on the workload that an operating unit can handle. Operating unit can be plant, department, machine, store or worker. Measured as a maximum product rate or throughput. Capacity decisions have different time frames: long, medium, short. Long term 1 to 5 years into the future: determine nature and level of workforce -> aggregate operations plans. Short term- next few days and weeks; usually up to 12 weeks ahead: determine nature and level of staffing and work shifts, determines product schedule of products or capacity of service. Outsource removes need to create capacity in-house. Commonly used to reduce costs, gain flexibility for variable demand, and take advantage of supplie(cid:396)s" e(cid:454)pe(cid:396)tise (cid:894)(cid:395)ualit(cid:455)(cid:895) Strategic capacity planning- systematic determination of facility and major machine/ equipment requirements to meet long term demand. Involves substantial financial and other resources; need to plan in advance to meet demand in time.