CHAPTER 5: Strategic Capacity Planning for Products and Services

A. TAKING STOCK:
1. What are the major trade-offs in capacity planning?
Ans: Having too much capacity and not having enough capacity is
a major trade-off in capacity planning. A lack of capacity will result
in wasted time and resources. Insufficient capacity, on the other
hand, will result in backorders or lost sales.
2. Who needs to be involved in capacity planning?
Ans: Capacity Planning mainly includes potential customers in
order for business management to maximize the sufficient
capacity. Capacity Planning includes employees and others that
are engaged with the business. Capacity planning is a type of
production planning that involves evaluating production capacity
and workforce responsibility to ensure that your supply chain is
ready to meet demand.
3. In what ways does technology have an impact on capacity
planning?
Ans: Data is collected from internal and external sources, stored in
a data warehouse, and made available to management via a
network. Your managers can use collaboration tools to plan
operations and make decisions collectively. By providing your
managers with the data they need to make good decisions,
technology can improve the accuracy of management planning.