Study Questions Ch 3 Capacity
2
Ch 3. Strategic Capacity Management Related Lecture and Discussion Identify or explain the following terms: capacity best operating level capacity utilization rate Give some examples of measures of capacity for both manufacturing and service industries. How is “capacity” different than “throughput rate”, “production rate” or “quantity produced”? What are the three time durations or horizons by which capacity planning is viewed? In planning the capacity of a facility, what is meant by economies of scale and diseconomies of scale? Are larger facilities always better? Explain. What is meant by capacity flexibility and how is it achieved? What is meant by economies of scope? When changing capacity levels, two basic issues are “when” and “how much” capacity to add. Regarding when to add capacity, what are the risks/issues in adding capacity in advance of demand vs after demand has developed? Regarding how much capacity to add, what are the risks/issues in adding capacity in large chunks vs small chunks? What is meant by capacity balance? What is a bottleneck or constraint? What methods are used to deal with capacity imbalances? (For future reference, The Goal advocates that one should not balance capacity but rather should balance flow. This would appear to contradict the textbook’s discussion of balancing capacity. How can one reconcile the difference?) How is capacity planning different in service industries as compared to manufacturing? How do time and location affect service capacity planning? What are some major capacity considerations in a hospital? How do they differ from those of a factory? How does service capacity utilization relate to service quality? What is the best operating point? What happens above the best operating point of utilization? (Note: this applies to services that experience variability in
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Capacity Planning
Transcript of Study Questions Ch 3 Capacity
Week 1 Study Questions:
Ch 3.Strategic Capacity ManagementRelated Lecture and Discussion
Identify or explain the following terms:capacitybest operating levelcapacity utilization rateGive some examples of measures of capacity for both manufacturing and service industries.How is capacity different than throughput rate, production rate or quantity produced?
What are the three time durations or horizons by which capacity planning is viewed?
In planning the capacity of a facility, what is meant by economies of scale and diseconomies of scale?Are larger facilities always better? Explain.
What is meant by capacity flexibility and how is it achieved?What is meant by economies of scope?
When changing capacity levels, two basic issues are when and how much capacity to add.Regarding when to add capacity, what are the risks/issues in adding capacity in advance of demand vs after demand has developed?Regarding how much capacity to add, what are the risks/issues in adding capacity in large chunks vs small chunks?
What is meant by capacity balance? What is a bottleneck or constraint?What methods are used to deal with capacity imbalances?(For future reference, The Goal advocates that one should not balance capacity but rather should balance flow. This would appear to contradict the textbooks discussion of balancing capacity. How can one reconcile the difference?)
How is capacity planning different in service industries as compared to manufacturing?How do time and location affect service capacity planning? What are some major capacity considerations in a hospital? How do they differ from those of a factory?
How does service capacity utilization relate to service quality? What is the best operating point? What happens above the best operating point of utilization? (Note: this applies to services that experience variability in demand and/or service delivery rate. A service with constant demand rate and constant service delivery rate could have a utilization rate closer to 1.00).
What is capacity cushion? How is it calculated?
Be able to calculate capacity requirements for a given situation when given the demand forecast and labor and equipment resources.
What is a decision tree?What symbols are used? How is it constructed and applied in decision-making?
What is the general concept of learning curves?Why is it important for organizations to have an understanding of the learning curve concept (i.e. what are the applications/implications)?What implications do learning curves have for capacity planning?
