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Understanding Design vs. Effective Capacity

The document discusses the concepts of design capacity, effective capacity, and actual output, highlighting how these factors influence capacity utilization in a facility. It emphasizes the importance of considering both long-term and short-term capacity requirements and the interrelated nature of system components in capacity planning. Additionally, it notes that capacity increases often occur in large increments, which may necessitate evaluating alternative solutions like overtime instead of purchasing new equipment.

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Jessie jorge
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27 views1 page

Understanding Design vs. Effective Capacity

The document discusses the concepts of design capacity, effective capacity, and actual output, highlighting how these factors influence capacity utilization in a facility. It emphasizes the importance of considering both long-term and short-term capacity requirements and the interrelated nature of system components in capacity planning. Additionally, it notes that capacity increases often occur in large increments, which may necessitate evaluating alternative solutions like overtime instead of purchasing new equipment.

Uploaded by

Jessie jorge
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

1. Design capacity is the maximum possible output.

Effective capacity is the


maximum output given product mix, scheduling realities, machine maintenance
requirements, and so on.

2. Design capacity

 This process may inhibit capacity utilization due to the output rate a facility
can handle because of what the facility is designed for.

Effective capacity

 This process can also contribute to capacity utilization when there are internal
problems for example scheduling or balancing operations and prioritizing
tasks throughout the facility.

Actual output

 Examples of this are having QC problems with the product that’s being
produce. Also having the man power and having shortages of material. These
are situation that operation manager has no control of this occurrences.

3. Long-term considerations are related to the overall level of capacity, while short-
term considerations are related to variations in capacity requirements caused by
seasonality, randomness, etc.

6. These amounts to a systems approach: the different parts of the system are
interrelated, so unless the entire system is considered, it is likely that the overall
system capacity will suffer. One example of this is expansion of a motel without
regard to the resulting need to consider expansion of parking, eating, and recreational
facilities. Similar examples include increased air flights into a city, housing
construction (impact on roads, sewers, schools, shopping, etc.), and increasing the
capacity of one machine in a series of machines.

7. Capacity in "chunks" refers to the large stepwise increases that are frequently
encountered in capacity decisions. An example would be adding a new machine.
Capacity in "chunks" is important because it means that small capacity increases may
not be feasible, or that other alternatives (e.g., working overtime instead of buying
another machine) may be worthy of consideration.

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