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1. Design the key in the design of facilities includes the size and
provision for expansion
2. Location locational factors (transportation costs, distance to market,
labor supply, and energy sources) are also important facility factors
3. Layout can determine how smoothly work can be performed in the
work area
4. Environment environmental factors (such as heating, lighting, and
ventilation) plays an important role in determining whether personnel

can work effectively or struggle under poor design characteristics

B. Product/Service
1. Design - can have a tremendous influence on capacity (the more
uniform the output, the more opportunities there are for
standardization of methods and materials, which leads to greater
2. Product or service mix - particular mix of products or services rendered
must also be considered since different items will have different rates
of output
C. Process
1. Quantity capabilities an important determinant of capacity
2. Quality capabilities if the quality does not meet standards, then
output rate decreases because of need of inspection and rework
* Another process factor to consider is the time it takes to change over
equipment settings for different products or services.
D. Human Factors
1. Job content refers to workers' job activities or what workers actually
do on the job; what jobs consist
2. Job design process of work arrangement (or rearrangement) aimed at
reducing or overcoming job dissatisfaction and employee alienation
arising from repetitive and mechanistic tasks

3. Training and experience training, skill, and experience required to

perform a job all affect the potential and actual output
4. Motivation the level of energy, commitment, and creativity that a
company's workers bring to their jobs
5. Compensation all of the rewards earned by employees in return for
their labor
6. Learning rates a decreasing function of time
7. Absenteeism and labor turnover serious problems for organizations
which affect its output rate
E. Policy management policy can affect capacity by allowing or not
allowing capacity options such as overtime or second or third shifts
F. Operational
1. Scheduling scheduling problems may occur when an organization has
differences in equipment capabilities among different pieces of
equipment or differences in job requirements
2. Materials management - an approach for planning, organizing, and
controlling all those activities principally concerned with the flow of
materials into an organization
3. Quality assurance the maintenance of a desired level of quality in a
service or product, especially by means of attention to every stage of
the process of delivery or production
4. Maintenance policies ensures that equipment are always in ready and
reliable condition
5. Equipment breakdowns loss due to mechanical or electrical
breakdown of nearly any type of equipment
G. Supply Chain key questions for factors affecting supply chain
includes: What impact will the changes have on suppliers,
warehousing, transportation, and distributors? If capacity will be
increased, will these elements of the supply chain be able to handle
the increase? If capacity is to be decreased, what impact will the loss
of business have on these elements of the supply chain?
H. External Factors
1. Product standards standard that establishes technical requirements
for the product
2. Safety regulations regulations or rules that are put in place to ensure
a product or service is safe and not dangerous

3. Unions an organized association of workers formed to protect and

further their rights and interests; a labor union
4. Pollution control standards implemented to control pollution of air,

water, and land