3 Capacity Planning Free Online FlashCards

What is capacity planning?

Capacity planning aligns an organization’s resources with expected demand, balancing service needs against the costs and risks of too much or too little capacity.

How should an operation’s capacity be measured?

Choose units that reflect the operation, such as customers served per hour, beds available, labor hours, or products per shift.

What is design capacity?

Design capacity is the maximum theoretical output under specified conditions.

How is capacity utilization calculated?

Utilization compares actual output with design capacity: $\text{Utilization} = \frac{\text{Actual output}}{\text{Design capacity}} \times 100\%$.

What is a capacity constraint?

A constraint is any resource or condition that limits an operation’s output, such as machine time, staffing, workspace, materials, or policy.

Steps handle 50, 30, and 40 orders per hour. What is the process capacity?

The process can handle at most $30$ orders per hour, because every order must pass through the step with capacity $30$ orders per hour.

What happens if capacity is increased at a non-bottleneck step?

Speeding up a non-bottleneck step does not raise total process capacity; it may instead create queues and excess work in process.

Name ways to respond when expected demand exceeds capacity.

If expected demand exceeds capacity, options include overtime, extra shifts, cross-training, process improvements, subcontracting, or investment in equipment and facilities.

What is a leading capacity strategy?

Leading capacity adds resources before demand is expected to rise. It can protect service and support growth, but risks idle resources if the forecast is too high.

What are the main steps in a capacity planning process?

Forecast demand, check effective capacity, identify gaps and constraints, compare alternatives and their effects, then monitor demand and output to adjust the plan. Account for demand uncertainty.

What is effective capacity?

Effective capacity is the output realistically achievable after accounting for operating limits such as maintenance, product mix, breaks, and setup time.

How is capacity efficiency calculated?

Efficiency compares actual output with effective capacity: $\text{Efficiency} = \frac{\text{Actual output}}{\text{Effective capacity}} \times 100\%$.