NAME: JOVIE S.

ESGUERRA

SECTION: BSE 3-2

ACTIVITY 7

1. What is capacity planning?

It is the process of determining the production capacity needed by an organization to meet

changing demand for its products. In other words, one of the most effective methods to
support your team is through capacity planning. There are other advantages, such as
improved budgeting planning.

2. How is capacity measured?

Measuring Capacity
Companies measure capacity in different ways using either
the input,
the output, or
the combination of the two.

There are two types of capacity used by the Companies which is the Theoretical and rated
capacity, The theoretical capacity is where the capacity doesn't have downtime in reaching its
maximum output, while the rated capacity is the output capacity that is based on a long-term
analysis.

3. Explain why capacity planning is important to a business

Capacity Planning is important because you can see if your plan is going well if everyone in
the working place is doing their jobs. You can have a better understanding of what will
happen next so you can create future plans for improvement. Capacity planning gives you
more data and information

4. What are the steps in capacity planning?

The first step is to determine the amounts of capacity required. by the firm both today and in
the future A corporation is unable to decide whether or not to acquire a new building without
knowing how much capacity would be required in the future.

In the second step, once capacity requirements have been identified, the company needs to
develop a set of alternatives that would enable it to meet future capacity needs.

The last step is the evaluation of alternatives where you need to seek alternatives that are the
best for the company's requirements.
 Step 1 Identify Capacity Requirements
Step 2 Develop Capacity Alternatives
Step 3 Evaluate Capacity Alternatives

5. What are decision trees, and how do they help us make better decisions?

The decision tree is the most powerful and widely used classification and prediction tool. A
decision tree is a tree structure that looks like a flowchart. You indicate a series of decisions
that you can able to choose more likely the decision that is very close to attaining the certain
goal is the one that will be chosen. You create a decision tree that e helps us to have a choice
between good decisions that will make the work have its better output.

6. Describe five factors that should be considered in the location decision.

Proximity to Source of Supply You sent Firms normally process a lot of products and they need a
bulk of raw materials to use it will be easier if their location is near the source of supply.

Proximity to Customer The best example of this is the Grocery and Fast-Food chains that need to be
located near to customers because they need to introduce their services to customers.

Proximity to source of Labor refers to the people who are employed to the business or even the
potential employees of the business. Business needs to make sure that the location of the firm is located
near the people who have skills and wants to be employed, they must have that certain skill needed in
the job. Business simply needs to be located in a populated area for its insurance in employees.

Community Consideration You sent Success of the company can be affected by its location because
the community welcomes new businesses as they see it as the providing source of tax and opportunities
for a job at their location that will help the community.

Other Consideration You sent There are some considerations that companies need to consider, for
example, the space they needed in the parking area, the access of customers to transportation, business
competitors, etc.