Operati0n

Capacity

By :
Yagya Pratap Singh
 Capacity
Capacity of a facility is its limiting capability
to produce an output over a period of time.
OR
Capacity is the upper limit or ceiling on the
load that an operating unit can handle.
 Types of capacity
Design capacity
 maximum output rate or service capacity an operation,
process, or facility is designed for
Effective capacity
 Design capacity minus allowances such as personal time,
maintenance, and scrap
Actual output
 rate of output actually achieved--cannot
exceed effective capacity.
 Efficiency and Utilization
Actual output
Efficiency =
Effective capacity

Actual output
Utilization =
Design capacity
 Efficiency/Utilization Example

Design capacity = 50 units/day

Effective capacity = 40 units/day
Actual output = 36 units/day

Actual output = 36 units/day

Efficiency = = 90%
Effective capacity 40 units/ day

Utilization = Actual output = 36 units/day

= 72% Design
capacity 50 units/day
 Capacity planning
“The process of determining the
production capacity needed by an
organization to meet changing
demands for its products.”
Process of capacity planning

1 ●
Determine market requirement

2 ●
Analyze current capacity

3 ●
Planning for future
 Types of capacity planning

Long term capacity planning

Short term capacity planning

 Need of capacity planning

To match future demand

For effective utilization of resources
 Inventory management
Decrease work in progress
Queries?