Discuss the importance of capacity planning

Discuss the importance of capacity planning
1. Why is it important to match process capabilities with product requirements?
12. Briefly discuss how uncertainty affects capacity decisions.
13. Discuss the importance of capacity planning in deciding on the number of police officers or fire
trucks to have on duty at a given time.
14. Why is capacity planning one of the most critical decisions a manager has to make?
15. Why is capacity planning for services more challenging than it is for goods production?
16. What are some capacity measures for each of the following?
a. University
b. Hospital
c. Computer repair shop
d. Farm
17. What is the benefit to a business organization of having capacity measures?
1. Determine the utilization and efficiency for each of the following situations.
a. A loan processing operation that processes an average of 7 loans per day. The operation has a
design capacity of 10 loans per day and an effective capacity of 8 loans per day.
b. A furnace repair team that services an average of four furnaces a day if the design capacity is
six furnaces a day and the effective capacity is five furnaces a day.
c. Would you say that systems that have higher efficiency ratios than other systems will always
have higher utilization ratios than those other systems? Explain.
2. In a job shop, effective capacity is only 50 percent of design capacity, and actual output is 80 percent
of effective capacity. What design capacity would be needed to achieve an actual output of eight
jobs per week?
PROBLEMS
1. What are the major trade-offs in capacity planning?
2. Who needs to be involved in capacity planning?
3. In what ways does technology have an impact on capacity planning?
TAKING STOCK
CRITICAL THINKING
EXERCISES
1. A computer repair service has a design capacity of 80 repairs per day. Its effective capacity, however, is 64 repairs per day, and its actual output is 62 repairs per day. The manager would like to
increase the number of repairs per day because demand is higher than 70 repairs per day, creating a
backlog of orders. Which factors would you recommend that the manager investigate? Explain your
reasoning.
2. Compared to manufacturing, service requirements tend to be more time dependent, location dependent, and volatile. In addition, service quality is often directly observable by customers. Find a
recent article in a business magazine that describes how a service organization is struggling with
one or more of these issues and make recommendations on what an organization needs to do to
overcome these difficulties.
3. Identify four potential unethical actions or inactions related to capacity planning, and the ethical
principle each violates (see Chapte