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Operations Management and Total Quality ManagementTopic 6
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Science, Technology and Society (GEC103)
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Cagayan State University
Academic year: 2021/2022
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Operations Management and Total Quality ManagementTopic 6
Course: Science, Technology and Society (GEC103)
210 Documents
Students shared 210 documents in this course
University: Cagayan State University
Was this document helpful?
Identify examples of short- and long-term capacity decisions.
SHORT-TERM CAPACITY PLANNING
- concerns issues of scheduling, labor shifts, and balancing resource capacities
- - goal is to handle unexpected shifts in demand in an efficient economic manner
- time frame is frequently only a few days but may run as long as six months
- EXAMPLES:
- • Number of casual or part-time workers to employ
• Amount of overtime scheduled for the week
LONG-TERM CAPACITY PLANNING
- relates primarily to strategic issues involving the firm’s major production facilities
- interrelated with location decisions
- technology and transferability of the process to other products
- may evolve when short-term changes in capacity are insufficient
- example: If the firm’s addition of a third shift to its current two-shift plan still does not produce enough
output, and subcontracting arrangements cannot be made, one feasible alternative is to add capital
equipment and modify the layout of the plant (long-term actions). It may even be desirable to add
additional plant space or to construct a new facility (long-term alternatives).
EXAMPLES:
• Purchasing a new machine with updated features for the manufacturing plant
• Construction of a new manufacturing plant
Question: How do you compute the capacity of a manufacturing or service resource?
Formula for production capacity
A factory’s capacity is presented in total minutes or hours or in pieces (production per day). The formula
used to calculate production capacity is:
1. Factory machine capacity in hours divided by
2. Product SAM (how long it takes to produce one unit of product)
3. Line efficiency (Average)
