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Capacity Management

Planning and controlling resources needed to meet

production objectives

Planning: Determining resources needed to meet

the priority plan

Selecting methods to make that capacity

available

Controlling: Monitoring output, comparing with the

plan, and taking corrective action

Capacity management occurs at each planning level

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Capacity Management

Techniues

Capacity

!euirements

Planning "C!P#

Priority Management

Techniues

!esource!euirements

Planning

"!!P#

Production

Plan

!ough$Cut

Capacity

Planning "!CCP#

Master

Production

Schedule

Material

!euirements

Planning "M!P#

Production

%ctivity Control

"P%C# &peration

Seuencing

'nput(&utput

Control

Planning )evels

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De*ining Capacity

The capability o* a system to per*orm itse+pected *unction

The capability o* a worker, machine, work

center, plant, or organiation to produceoutput per time period

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Capacity Planning Process

Determine the capacity available Translate the released and planned orders

into capacity reuired

Sum up capacities reuired *or each work

center

!esolve di**erences between available

capacity and reuired capacity

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Determining Capacity %vailable

Capacity available is-The capability o* a system or resource to produce a uantity o*output in a particular time period.

APICS Dictionary

%vailable capacity can be calculated or measured

To calculate available capacity, identi*y %vailable time /tiliation

0**iciency

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%vailable Time

%vailable time: depends on the number o*machines, number o* workers, and hours o*

operation

1umber o* machines "or number o* workers# 2 hours o* operation

3hat is the weekly available time *or a workcenter that has *our machines and works eight

hours a day *or *ive days a week4

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/tiliation

/tiliation: Percentage o* the time that the workcenter is active

0+ample: 3ork center is available 567 hours

a week, but actually produces goods *or 87 hours

5779hours%vailable

orkedactually w:oursn/tili,atio =

utiliation;

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Problem 5

% work center produces 87 standard hours o*work in one week> The hours scheduled are

?7, and ;7 are actually worked> Calculate the

utiliation and e**iciency o* the work center>

/tiliation =

0**iciency = =5779orkedactually wours

worko*hoursStandard

=5779

hours%vailable

orkedactually w:ours

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!ated Capacity

!ated capacity = available time + utiliation + e**iciency

0+ample: % work center consists o* three machines and is

operated eight hours a day *or *ive days a week>Past utiliation has been ;

%vailable time =

!ated capacity =

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Problem 6

% work center consists o* si+ machines thatare available 5@ hours per day *or *ive days a

week> /tiliation is ?79, and e**iciency is

5579> 3hat is the rated weekly capacity4

!ated weekly capacity =

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Demonstrated Capacity

Proven capacity calculated *rom actual per*ormancedata

0+ample: &ver the previous *our weeks, a work

center produced 557, 5A7, 567, and 5B7

standard hours o* work> 3hat is the

demonstrated capacity4

Demonstrated weekly capacity = standard hours(week

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)oad

enerated by the priority planning system"M!P#

Translates the priorities, given in units, into

time reuired at each work center in eachtime period

Takes place at each planning level

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Capacity !euirements Planning

Need to Know Take Information From&pen shop orders &pen order *ile

Planned order releases M!P

3here work is done !outing *ile

Time needed "standard hours# !outing *ile

)ead times !outing *ile

3ork center *ile

3ork center capacity 3ork center *ile

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Sun.Week Mon. Tues. Wed. Thurs. Fri. Sat.Month

July

56; 56? 568 5B7 5B5

8 57 55 56 5B 5A 5