ECON 1 Lecture Notes - Lecture 12: Fixed Cost, Ibm System R, European Cooperation In Science And Technology
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6. 1 capacity capacity: the capability of a worker, a machine, a workcenter, a plant, or an organization to produce outputin a time period. Supply chain managers must consider several issues: how capacity is measured, which factors affect capacity, the impact of the supply chain on the organization"s effective capacity. In general, companies measure capacity in terms of inputs, outputs, or some combination of the two. In organizations that provide standard products or services, capacity is likely to be expressed in terms of outputs because the output doesn"t change radically from one period to the next. A firm"s capacity concerns certainly aren"t limited to just its activities. In many cases, a firm must also consider the capacities of key suppliers and distributors. 6. 2 three common capacity strategies lead capacity strategy: a capacity strategy in which capacity is added in anticipation of demand.
