Operations Management Capacity Design. Long Range Planning. Add Facilities. Intermediate Range Planning. Sub-Contract Add Equipment Add Shifts. Add Personnel Build or Use Inventory. Schedule Jobs Schedule Personnel Allocate Machinery. Short Range Planning.
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Long Range Planning
Intermediate Range Planning
Build or Use Inventory
Short Range Planning
The maximum “throughput,” or number of units a facility can produce in a period of time.
Capacity a firm can expect to achieve given its product mix, methods of scheduling, maintenance, and standards of quality.
Actual output as a percent of design capacity.
Actual output as a percent of effective capacity.
Measure of planned or actual capacity usage of a facility, work center, or machine
Measure of how well a facility or machine is performing when used
Facility produces breakfast rolls
Same facility adding one more line due to increase in demand for deluxe rolls
Total revenue line
Total cost = Total revenue
Total cost line
Cost in Dollars
Process A: low volume, high variety
Process B: Repetitive
Process C: High volume, low variety
Total cost - Process A
Total cost - Process B
Total cost - Process C
Fixed cost - Process C
Fixed cost - Process B
Fixed cost - Process A
Lowest cost process
BEPrs.= FC (amount)
BEPrs.= FC (multi product)
P=Selling price, V=variable cost
3500*12 = 67200