Capacity Planning
Chapter 12: Capacity Planning
Question #1: Why are facilities decisions often made by top management? What is the role in these decisions of operations, marketing, finance, accounting, engineering, and human resources?
“Facilities decisions often made up by the top management and the chief executive, and the board of directors because these decisions are strategic in nature, they require the input of all functional areas in the firm.” It is longest-term planning decision that contains all the important questions of the firm or organization business future. Facilities decisions have to answer to questions like how much capacity is needed, when is it needed, where should be located and what types of facilities needed that are exceedingly complex and difficult to analyze. These decisions place physical constrains on the amount that can be produced, and they often required significant capital investment. Therefore, facilities decisions involve all organizational functions and often are made at the highest corporate level.
“The facilities strategy considers the amount of capacity, the size of facilities, the timing of capacity changes, facilities locations, and the types of facilities needed for the long run.” It must be coordinated with other functional areas due to the necessary investments that in finance area, marketing look for market sizes that determine the amount of capacity needed, workforce issues related to staffing new facilities that have to be consider by human resources, accounting have to estimate costs of new facilities and engineering should consider technology decisions regarding equipment investment. The cross-functional team meets with general manager to agree on the sales forecast, the supply plan, and any steps needed to modify supply and demand that drive any business company.
Schroeder, R., Goldstein, S., & Rungtusanatham, M. (2013). Operations Management in the Supply Chain. 6th edition. McGraw-Hill, New York, N.Y.
Question #1: Why are facilities decisions often made by top management? What is the role in these decisions of operations, marketing, finance, accounting, engineering, and human resources?
“Facilities decisions often made up by the top management and the chief executive, and the board of directors because these decisions are strategic in nature, they require the input of all functional areas in the firm.” It is longest-term planning decision that contains all the important questions of the firm or organization business future. Facilities decisions have to answer to questions like how much capacity is needed, when is it needed, where should be located and what types of facilities needed that are exceedingly complex and difficult to analyze. These decisions place physical constrains on the amount that can be produced, and they often required significant capital investment. Therefore, facilities decisions involve all organizational functions and often are made at the highest corporate level.
“The facilities strategy considers the amount of capacity, the size of facilities, the timing of capacity changes, facilities locations, and the types of facilities needed for the long run.” It must be coordinated with other functional areas due to the necessary investments that in finance area, marketing look for market sizes that determine the amount of capacity needed, workforce issues related to staffing new facilities that have to be consider by human resources, accounting have to estimate costs of new facilities and engineering should consider technology decisions regarding equipment investment. The cross-functional team meets with general manager to agree on the sales forecast, the supply plan, and any steps needed to modify supply and demand that drive any business company.
Schroeder, R., Goldstein, S., & Rungtusanatham, M. (2013). Operations Management in the Supply Chain. 6th edition. McGraw-Hill, New York, N.Y.