Capacity planning
Introduction
Capacity may be defined as the maximum or limiting capability of a production unit to produce in a specific period. This is expressed in terms output per unit of time. If stated period of time is one month, the capacity is said to be the limiting capability of the producing unit in one month, e.g. 10,000 units per month. This capacity is the capability of the producing unit under given (or specified) conditions, e.g. one shift working/ two shifts working or three shifts working or one related to the intensity of the facilities used.
Capacity
Capacity of a production unit refers to the ability of a company to produce goods that are required by the customers. Capacity is the maximum limit of the load that a production unit of an organization can handle.
Meaning: capacity is a limiting planning of a production unit to production with in a stated time period normally expressed as output unit per unit of time.
Measures of capacity
Different types of organization use different measures of capacity.
Types of capacity
Designed capacity
The design capacity of a system is the rate of output of goods or services under full scale operating conditions. It is based on plant design which in turn is based on long range forecast extending 5 to 10 years into the future. For example: a cement factory may be designed to produce 200 tons per day. The projected demand for a period anywhere from 5 to 10 years is taken as the estimate for the design capacity, since frequent expansion will lead to productivity loss.
Effective capacity
The maximum outputs of a specific product or product mix that the system of workers and equipment is capable of producing as an integrated whole is called system capacity or effective capacity.
This may be less than that of design capacity. The actual output may be even less than the system capacity since it is affected by short range factors such as actual demand, equipment breakdowns, and personal absenteeism or productivity.
Effective capacity = achievable capacity 100
Designed capacity
Rate capacity
Rate capacity is the actual capacity achievable under stated conditions.
Rate capacity = achievable capacity
= (designed capacity utilization) efficiency
Factors affecting determination of plant capacity
1. Market demand for a product or service.
2. The amount of capital that can be invested.
3. Degree of automation desired.
4. Level of integration (i.e. vertical integration).
5. Type of technology selected.
6. Dynamic nature of all factors affecting determination of plant capacity, viz, changes in the product design, process technology, market conditions, and product life cycle, etc.
7. Difficulty in forecasting future demand and future technology.
8. Obsolescence of product and technology over a period of time.
9. Flexibility for capacity additions.
Capacity planning
It is a process that helps identify the capacity of a production unit that is required for meeting the current and future customer demands. Capacity planning is required when you start a new manufacturing unit, extend the operations of an existing manufacturing unit and introduce new products in the manufacturing unit.
Definition
According to R. Dan Reid and Nada R. Sanders, “capacity is the maximum output rate of a production or service facility and capacity planning is the process of establishing the output rate that may be needed for at a facility”.
Factors affecting capacity planning
1. controllable factors such as amount of labour employed, facilities installed, machines, tooling, shifts worked per day, days worked per week, overtime work, sub-contracting, alternative routing of work, preventive maintenance and number of production set-ups.
2. less controllable factors are absenteeism, labour performance, machine break-downs, material shortage, scrap and rework and unexpected problems such as strike, lockout, fire, accidents etc.
Need for capacity planning
Capacity planning is necessary when an organization decides to increase its production or introduce new products into the market. Once capacity is evaluated and a need for new or expanded facilities is determined, decisions regarding the facility location and process technology selection are taken. Thus capacity planning design includes:
o Re-assessment of existing capacity
o Effect of change in demand, i.e. effect of addition, deletion of products and their impact on existing capacity.
o Identifying ways of meeting desired capacity
a) Better utilization
b) High efficiency
c) Overtime
d) Adding a shift
Capacity planning process
1. Assessing the existing capacity: - Different use different ways to measure their production capacity. For example: general motor corporation defines capacity in terms of total no of automobiles produced per year.
2. Forecasting future capacity requirement: - To estimate the future capacity requirements of an organization, you should keep in mind the short term and long term requirements of the organization.
3. Identifying alternative ways: - After determining the existing and future capacity requirements, you may also need to identify the ways to modify the existing capacity of an organization. You can categories the strategies for modifying capacities into two responses: short term and long term responses.
4. Evaluation of short term and long term capacity requirements: - After modifying the existing capacity of an organization, you can evaluate the short term and long term capacity requirements with the help of following models: linear programming and decision tree analysis model.
5. Selective the suitable alternative: - After evaluating the short term and long term capacity requirements, a company selects and takes necessary measure to implement the best alternative for optimally utilizing the resources of an organization.
Those persons want to get the diagram of this system then mail me himanshu143goel@gmail.com
Introduction
Capacity may be defined as the maximum or limiting capability of a production unit to produce in a specific period. This is expressed in terms output per unit of time. If stated period of time is one month, the capacity is said to be the limiting capability of the producing unit in one month, e.g. 10,000 units per month. This capacity is the capability of the producing unit under given (or specified) conditions, e.g. one shift working/ two shifts working or three shifts working or one related to the intensity of the facilities used.
Capacity
Capacity of a production unit refers to the ability of a company to produce goods that are required by the customers. Capacity is the maximum limit of the load that a production unit of an organization can handle.
Meaning: capacity is a limiting planning of a production unit to production with in a stated time period normally expressed as output unit per unit of time.
Measures of capacity
Different types of organization use different measures of capacity.
Types of capacity
Designed capacity
The design capacity of a system is the rate of output of goods or services under full scale operating conditions. It is based on plant design which in turn is based on long range forecast extending 5 to 10 years into the future. For example: a cement factory may be designed to produce 200 tons per day. The projected demand for a period anywhere from 5 to 10 years is taken as the estimate for the design capacity, since frequent expansion will lead to productivity loss.
Effective capacity
The maximum outputs of a specific product or product mix that the system of workers and equipment is capable of producing as an integrated whole is called system capacity or effective capacity.
This may be less than that of design capacity. The actual output may be even less than the system capacity since it is affected by short range factors such as actual demand, equipment breakdowns, and personal absenteeism or productivity.
Effective capacity = achievable capacity 100
Designed capacity
Rate capacity
Rate capacity is the actual capacity achievable under stated conditions.
Rate capacity = achievable capacity
= (designed capacity utilization) efficiency
Factors affecting determination of plant capacity
1. Market demand for a product or service.
2. The amount of capital that can be invested.
3. Degree of automation desired.
4. Level of integration (i.e. vertical integration).
5. Type of technology selected.
6. Dynamic nature of all factors affecting determination of plant capacity, viz, changes in the product design, process technology, market conditions, and product life cycle, etc.
7. Difficulty in forecasting future demand and future technology.
8. Obsolescence of product and technology over a period of time.
9. Flexibility for capacity additions.
Capacity planning
It is a process that helps identify the capacity of a production unit that is required for meeting the current and future customer demands. Capacity planning is required when you start a new manufacturing unit, extend the operations of an existing manufacturing unit and introduce new products in the manufacturing unit.
Definition
According to R. Dan Reid and Nada R. Sanders, “capacity is the maximum output rate of a production or service facility and capacity planning is the process of establishing the output rate that may be needed for at a facility”.
Factors affecting capacity planning
1. controllable factors such as amount of labour employed, facilities installed, machines, tooling, shifts worked per day, days worked per week, overtime work, sub-contracting, alternative routing of work, preventive maintenance and number of production set-ups.
2. less controllable factors are absenteeism, labour performance, machine break-downs, material shortage, scrap and rework and unexpected problems such as strike, lockout, fire, accidents etc.
Need for capacity planning
Capacity planning is necessary when an organization decides to increase its production or introduce new products into the market. Once capacity is evaluated and a need for new or expanded facilities is determined, decisions regarding the facility location and process technology selection are taken. Thus capacity planning design includes:
o Re-assessment of existing capacity
o Effect of change in demand, i.e. effect of addition, deletion of products and their impact on existing capacity.
o Identifying ways of meeting desired capacity
a) Better utilization
b) High efficiency
c) Overtime
d) Adding a shift
Capacity planning process
1. Assessing the existing capacity: - Different use different ways to measure their production capacity. For example: general motor corporation defines capacity in terms of total no of automobiles produced per year.
2. Forecasting future capacity requirement: - To estimate the future capacity requirements of an organization, you should keep in mind the short term and long term requirements of the organization.
3. Identifying alternative ways: - After determining the existing and future capacity requirements, you may also need to identify the ways to modify the existing capacity of an organization. You can categories the strategies for modifying capacities into two responses: short term and long term responses.
4. Evaluation of short term and long term capacity requirements: - After modifying the existing capacity of an organization, you can evaluate the short term and long term capacity requirements with the help of following models: linear programming and decision tree analysis model.
5. Selective the suitable alternative: - After evaluating the short term and long term capacity requirements, a company selects and takes necessary measure to implement the best alternative for optimally utilizing the resources of an organization.
Those persons want to get the diagram of this system then mail me himanshu143goel@gmail.com
Comments
Post a Comment