L7 Capacity management (•What is capacity management? (Measuring capacity…
L7 Capacity management
•What is capacity management?
maxium output+ a given period of time
Measuring capacity (3 indicator)
1 Design capacity
= 2 Effective capacity
= Actual capacity
OEE operating equipment effectiveness
valuable operating time/
net operating time
net operating time/
total operating time
Total operating time/
•What are the ways of coping with demand fluctuation?
Total demand/ producion days
(2) 3 reconciling
capcity & demand
Chase demand (zero inventory plan)
: change workforce each period and produce just enough to meet demand.
: change the pattern of demand
demand partioning/ segementation
use price differiation to change demands
promoting off-peak demand
Level capacity(Constant workforce)
: maintain minimum production level/ constant workforce to satisfy demand.
Make customer wait
•How can operations plan their capacity level?