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Flashcards

L#3 Capacity Planning

Block Manufacturing Operations and Technology English 30 cards

Cards in this deck (30)

  1. 1Define Capacity (1)Capacity is the maximum level of value-adding activity over a period of time that the manufacturing process can achieve under normal operating conditions (1)
  2. 2What is the design capacity? (1)The maximum attainable output (1)
  3. 3What is the effective capacity? (1)The maximum capacity with product mix, scheduling challenges and other issues taken into account (1)
  4. 4What is the actual output? (1) How is this restricted? (1)It is the rate of output that is actually achieved; this can never exceed the effective capacity. (2)
  5. 5Define utilization (1)Utilization is an indicator of how close the facility is functioning with regards to its design capacity. (1)
  6. 6Draw a plot of unit cost changing with utilization (1)See notes
  7. 7Where can the best operating point usually be found? (1)At 70% of the design capacity (1)
  8. 8Define efficiency in words (1)Efficiency indicates how close the facility is functioning to the effective capacity (1)
  9. 9Give the formula for utilization (1)Utilization = (Actual output) / Design Capacity (1)
  10. 10Give the formula for efficiency (1)Efficiency = (Actual output)/(Effective Capacity) (1)
  11. 11A manufacturing line has a design capacity of 120 units/week. It is now producing 70 units / week. What is the utilization? (1)0.625 = 62.5% (1)
  12. 12Why can measuring capacity be difficult? (1)Because many manufacturing operations are quite complex (1)
  13. 13What are the two different ways of measuring capacity? (1) Give two examples of each. (2)1. Input and output capacity
    2. Outputs: The capacity of an electrical supplier or the volume of beer produced by a brewery
    3. Inputs: The number of beds available in a hospital, student places at a university
  14. 14What factors affect long term capacity planning? (3)1. Decide on the size of the operation (capacity)
    2. How much capital is available to the company
    3. The economies and dis-economies of scale.
  15. 15Define 'economies of scale'. (1)The decrements in unit cost with the increase in volume (1)
  16. 16Define 'diseconomies of scale' (1)The increments of unit cost resulting from an increase in volume (1)
  17. 17Draw some plots showing economies and diseconomies of scale in a manufacturing plant. Relate each plot with to the coffee shop exampleSee notes
  18. 18What is medium-term capacity planning? (1)Deciding the level of production in a time period at which a manufacturing system should operate (1)
  19. 19What are the three major steps in planning the capacity of a manufacturing system? (3)1. Measure aggregate demand and capacity
    2. Identify the alternate capacity plans
    3. Choose the most appropriate capacity plan
  20. 20What are the three pure options for planning the capacity of a manufacturing operation in in the face of fluctuating demand that are usually combined in practice? Explain each (6)1. LEVEL CAPACITY PLAN: in which the fluctuation are ignored and the activity levels are kept constant. Where non-perishable materials are processed but not immediately sold, they can be transferred to finished goods inventory in anticipation of future sales.
    2. CHASE DEMAND PLAN: in which an attempt is made to match the capacity closely to the varying levels of forecasting demand (i.e. hiring and firing, using part-time staff)
    3. MANAGE DEMAND PLAN: in which an attempt is made to change and level demand through price manipulation (i.e. promotions for off-season tickets). Sometimes, the available resources can produce alternative products and services in off-peak times (i.e. university halls of residence being used for conference accommodation in the summer)
  21. 21What is the effect of quality on capacity? (2)The existence of defective products in the manufacturing process increases the required capacity (1); in such cases the company has to produce more than the demand as some of the produced output is defective and would not be shipped to customers (1)
  22. 22Give the formula modelling capacity requirements with yield loss (1)B = {M}{(1 - d1)(1 - d2) ... (1 - dn)}
    where:
    B is the average number of produced parts
    M is the number of good products made
    n is the number of operations in the production process
    d is the average proportion of defective units at operation i
  23. 23A three operation process is followed by inspection. The average proportion of defective parts produced at operation 1, 2 and 3 are 0.05, 0.01 and 0.04 respectively. If the demand is 5643 units per month, what is the required capacity for this process? (1)6250 (1)
  24. 24What are capacity decision trees used for? (1)Are used to calculate the expected benefits provided by various capacity expansion plans under different demand scenarios (1)
  25. 25Define the equation and diagram for capacity decision trees. (3)See notes
  26. 26What are the four capacity expansion strategies? (4)1. At the entrepreneurial stage, the company might decide to move resources to different tasks as needed. In case of suppliers to companies, the production might shift to customers.
    2. Services might be added to the existing site with new machines and facilities purchased
    3. The existing services might be duplicated at additional sites.
    4. The company might relocate to more suitable (e.g. larger) premises
  27. 27Time-wise, explain the two capacity expansion strategies (2)1. EXPANSIONIST STRATEGY: The capacity is increased before demand exceeds the existing capacity
    WAIT-AND-SEE Capacity is only increased once demand exceeds the existing capacity (1)
  28. 28Give the advantages and disadvantages of expansionist and wait-and-see expansion strategies (6)EXPANSIONIST:
    ADV: Ahead of competition (1)
    No lost sales (1)
    DIS: Risky if demand changes (1)
    WAIT-AND-SEE:
    ADV: No unused capacity (1)
    Easier to adapt to new technologies (1)
    DIS:
    Relies on short-term options (1)
  29. 29Draw graphs for the expansionist and wait-and-see strategiesSee notes
  30. 30What short term options are there to increase capacity? (11)1. Lease extra space temporarily: if the resource bottleneck is the result of lack of space, this could resolve the constraint. The company will usually have to pay more money for a short term lease.
    2. Authorize overtime: This is useful when the capacity shortfall is in human resources and the amount is not substantial. Constraint overtime could hinder productivity.
    3. Staff second or third shift with temporary workers: quality could suffer. Only relevant when the company is not already working multiple shifts.
    4. Alternate routings, using different workstations with excess capacity: requires planning and could lead to a very high complexity and a decrease in productivity due to routing confusions.
    5. Add weekend shifts: Similar to overtime with same disadvantages
    6. Schedule longer runs to minimise capacity losses: decreases flexibility, could pose scheduling problems.
    7. Level output by building up inventory in slack season: not applicable to perishable products, requires space for invetory.
    8. Postpone preventive maintenance: could lead to reliability problems.
    9. Use multi-skilled workers to alleviate bottlenecks: multi-skilled workers cost more to employ. Planning would be more difficult.
    10. Allow backorders to increase, extend due date promises, or have stock-outs: could affect reputation.
    11. Subcontract work: the knowledge in the company will be shared with outsiders

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Manufacturing Operations and Technology Flashcards on L#3 Capacity Planning, created by Block on 30/04/2014.
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