Variety Management Topics
CAPACITY PLANNING
POM
1/31/2012
MTR
Odeny Okelo
CAPACITY PLANNING
Definition (capacity)
“The number of units produced per time period” By Williams
“The maximum production rate of an organization” By Norman Gaither
“The amount of output of an operation over some specified duration” By J R Meredith and T E Gibbs
From the above definitions capacity simply means the maximum production output of an organization over a specified period e.g. ✓ A vehicle manufacturer knows how many cars the facility can produce each day, month and year ✓ Hospital can treat a certain number of patients per day, month, and year. ✓ The classroom building can serve a certain number of students in the course of a day Note: ✓ Organizations have to know the capacity of their operations for effective planning ✓ Capacity should be developed in relation to the demand for the product, this is because capacity levels determines the organization’s ability to meet the demand for its products ✓ Demand is not constant. It changes from year to year, month to month. Thus, an effective capacity planning must/ should consider the current demand for a product and the anticipated demand in future
Capacity can be defined from different perspectives: 1. Designed capacity ✓ The output per unit of time for which the plant was designed ✓ It is the historical and the theoretical capacity designed at the time of conception 2. Rated capacity ✓ The output per unit of time that the facility is theatrically capable of producing. ✓ It is usually larger/smaller than the designed capacity due to periodic improvements / reduction ✓ Rated capacity is an improved designed capacity
POM
1/31/2012
MTR
Odeny Okelo
CAPACITY PLANNING
Definition (capacity)
“The number of units produced per time period” By Williams
“The maximum production rate of an organization” By Norman Gaither
“The amount of output of an operation over some specified duration” By J R Meredith and T E Gibbs
From the above definitions capacity simply means the maximum production output of an organization over a specified period e.g. ✓ A vehicle manufacturer knows how many cars the facility can produce each day, month and year ✓ Hospital can treat a certain number of patients per day, month, and year. ✓ The classroom building can serve a certain number of students in the course of a day Note: ✓ Organizations have to know the capacity of their operations for effective planning ✓ Capacity should be developed in relation to the demand for the product, this is because capacity levels determines the organization’s ability to meet the demand for its products ✓ Demand is not constant. It changes from year to year, month to month. Thus, an effective capacity planning must/ should consider the current demand for a product and the anticipated demand in future
Capacity can be defined from different perspectives: 1. Designed capacity ✓ The output per unit of time for which the plant was designed ✓ It is the historical and the theoretical capacity designed at the time of conception 2. Rated capacity ✓ The output per unit of time that the facility is theatrically capable of producing. ✓ It is usually larger/smaller than the designed capacity due to periodic improvements / reduction ✓ Rated capacity is an improved designed capacity