Capacity Planning
UNIT – 3
CAPACITY PLANNING
CONCEPT: Capacity simply means the ability to hold, receive, share or accommodate. It is a productive capability or a facility. Capacity is a critical consideration for long term strategy. It is generally measured in volume of output per unit of time. Capacity is the limiting capability of a productive unit to produce within a stated time period, normally expressed in terms of output per unit of time. So, capacity is the maximum productive capability. Capacity can be measured in different ways. Capacity has different meaning to different people at different level of management. The top management is concerned with aggregate capacity of all plant of the firm and financial resources require for supporting these plants but operation manager is concerned with capacity planning with individual plant. Therefore, capacity planning is the process of determining the capacity requirement in future. Production and operation manager is concerned with the determining capacity requirement in term of time dimension. They are long-ranged and short-ranged. So, capacity planning is always focus in determination of the overall capacity level of capital intensive resources like facilities, equipment, labours etc. that support the long term competitive strategy of organization.
CAPACITY PLANNING PROCESS: Capacity planning is the process of testing the feasibility of aggregate output plants and evaluating the overall capacity utilization. In capacity planning process the following steps should be followed:
Step 1: Assessing of Existing Capacity The first step of capacity planning decision is measurement of existing capacity level of each work sectors leading to whole organizations. Capacity is determined as rate of output per unit of time. It is simple to measure capacity if the outputs are of simple nature. Is the outputs are of different nature then it becomes quite difficult to measure capacity.
Step 2:
CAPACITY PLANNING
CONCEPT: Capacity simply means the ability to hold, receive, share or accommodate. It is a productive capability or a facility. Capacity is a critical consideration for long term strategy. It is generally measured in volume of output per unit of time. Capacity is the limiting capability of a productive unit to produce within a stated time period, normally expressed in terms of output per unit of time. So, capacity is the maximum productive capability. Capacity can be measured in different ways. Capacity has different meaning to different people at different level of management. The top management is concerned with aggregate capacity of all plant of the firm and financial resources require for supporting these plants but operation manager is concerned with capacity planning with individual plant. Therefore, capacity planning is the process of determining the capacity requirement in future. Production and operation manager is concerned with the determining capacity requirement in term of time dimension. They are long-ranged and short-ranged. So, capacity planning is always focus in determination of the overall capacity level of capital intensive resources like facilities, equipment, labours etc. that support the long term competitive strategy of organization.
CAPACITY PLANNING PROCESS: Capacity planning is the process of testing the feasibility of aggregate output plants and evaluating the overall capacity utilization. In capacity planning process the following steps should be followed:
Step 1: Assessing of Existing Capacity The first step of capacity planning decision is measurement of existing capacity level of each work sectors leading to whole organizations. Capacity is determined as rate of output per unit of time. It is simple to measure capacity if the outputs are of simple nature. Is the outputs are of different nature then it becomes quite difficult to measure capacity.
Step 2: