BSOP-334

Professor-Earl Wiese

Week 6

12/07/13
 Chapter 5: Discussion and Review Questions: 1, 2, 6, 11, & 15 (p. 208), Problem 13 (p.

210)

1. Contrast design capacity and effective capacity.

Design capacity is the service capacity/out rate at the maximum allowance. Under ideal

conditions this would be the most output that could be produced. Where as effective capacity is

the "design capacity minus the personal and other allowances." The design takes in

consideration for such things as changing product mix and machine maintenance, lunch and

breaks. The effective capacity will always be less than that of the design capacity.

2. List and briefly explain three factors that may inhibit capacity utilization.

Factors that may inhibit capacity utilization can be such as similar items being produced. Such an

example is a restaurant that sell a limited amount of meals on their menu can usually serve at a

faster rate than that of one who has a much vaster array of choices.

The productivity factor can take into account in such that if the changing and

resetting/calibrating machines can slow the productivity down.

The human factor as well which can affect the capacity in which the varied activity, training,

skills, and experience have an impact.

6. Why is it important to adopt a big-picture approach to capacity planning?

Capacity planning can be very helpful to a company, because it can help bridge the gap in

demand. This can help a company to not become out of balance. This can help to achieve a long-

term supply and be able to predict the level of long-term demand. Companies should take in

account for the demands when looking at the "big picture" the book gives an example of adding

more rooms to a motel that the increase of the need for parking and housing should be consider.

As well as if the supplies can handle the increase in volume.

11. Why is it important to match process capabilities with product requirements?

When a company can't match process capabilities with product requirements it can lead to

inefficiencies and higher cost. This can create a competitive disadvantage.

15. Why is capacity planning for services more challenging than it is for goods production?

One reason that capacity planning for services is more challenging is that there are more

variables. In a service it is not "cut and dry" it can be difficult to measure (quantify), but is more

pervasive. The book gives an example of a painter, we don't measure by room or square footage,

but on detail.

13.The following diagram shows a 4-step process that begins with Operation 1 and ends with

Operation 4. The rates shown in each box represent the effective capacity of that operation.

12/hr 15/hr 11/hr 14/hr

Op1 Op2 Op3 Op4

 a. Determine the capacity of this process.

11 unit/hr

 b. Which action would yield the greatest increase in process capacity:

 (1) increase the capacity of Operation 1 by 15 percent; (2) increase the capacity of

Operation 2 by 10 percent; or (3) increase the capacity of Operation 3 by 10 percent?

Operation 3 should be increase by 10 percent, because this is where the operation bottle necks.

By increasing 10 percent this gives us 12 total and since operation is already at 12/hr this would

raise the rate per hour to 12 units per hour.