© Oxford University Press 2013. All Rights Reserved

© Oxford University Press 2013. All rights reserved.
Need for Facility Capacity Planning
To find the optimal capacity of

the facility so that the total of
costs of under-capacity and
over-capacity is the minimum
To keep the initial

To satisfy the future investment in the facility
demand of products Need for Facility
Capacity Planning as low as possible to
without any shortages
achieve lesser break-even
volume
Investments in facility
capacity are long-term
and cannot be reversed
easily over the period of
time

Types of Capacity
• Design capacity represents the maximum rate of output that can be

achieved under ideal conditions.
• Effective capacity is the maximum rate of output which can be
practically achieved under the constraints of time consumed in set-
ups, oiling & cleaning, defective items, etc. Effective capacity is
always lesser than the design capacity.
• Actual capacity is the maximum output rate which is actually
achieved under the constraints of machine breakdowns, labor
inefficiencies & absenteeism, defective products, late deliveries of
materials by the supplier, and so on. Actual capacity can be equal to
or less than the effective capacity.

Ways of Increasing Effective Capacity
Proper process quality control

so that there are less
defective items requiring
rework
Proper facility Good training, high

location, layout, motivation, less absenteeism
and internal & high turnover on part of
working conditions Ways of workers
Increasing
Effective
By making products Capacity
& services as Good coordination with suppliers
uniform as possible for timely & defect-free supplies
in design so that and proper scheduling of products
number of set-ups on machines
required are less By properly following the
(batch sizes will be environmental and pollution norms,
large) which results in lesser inspections by
government enforcement agencies
and, thus, lesser disruption of
production activities

Trends in Demand Forecasts
Demand Decline
forecast Growth Demand trend
trend forecast
Time Time
Demand
forecast Demand
Cyclical forecast Stable
trend trend
Time
Time
Products A & B
Demand Product B
forecast
Product A
Time

Optimal Capacity Determination
Average cost
per unit of the
product
0 Optimal output rate Output rate
Part a
Small-sized
Average cost Plant
per unit of the
product
Medium-
sized Plant
Large-sized
Plant
0 Output rate
Part b

Types of Layouts
• Product Layout
• Process Layout
• Fixed-Position Layout
• Cellular Layout

An Assembly Line (Product Layout)
Racks containing Racks containing

Racks containing
headlight sub-assembly steering wheels
backlight sub-assembly
sub-assembly
Workstation 1 Workstation 2
Workstation 3
Car 1 Car 2 Car 3
Conveyor

Advantages & Disadvantages of Product
Layout
A high output
rate and, thus, High efficiency
Lesser supervision & low cost of of labor &
labor training costs item per unit equipment
(as labor is trained
only for a specialized
task)
No need of routing or
Easier material Advantages scheduling once the line is
handling and lesser operational (as it is already
inventory costs done during the design of
Product the line)
Layout
Maintenance cost is
fairly high to ensure Monotonous repetitive tasks
smooth running of Disadvantages lead to frustration on part of
the line workers
Inflexible to design Breakdown of a machine or

changes in products or high absenteeism of
processes (the changes workers leads to halt in
in line are usually production
expensive)

A U-shaped Assembly Line
1 2 3
4
The entry &
exit points
are nearby A single worker
5
8 7 6

Process Layout of an Automobile Service Station
Final Underbody Engine Paint

Inspection Repairs Repairs Booth Car
washing &
cleaning
Office
Dents
Spare Interiors, Repair
Oil Wheel Electrical
Parts Replacement Alignment Repairs Door
Store Repairs, etc.

Advantages & Disadvantages of Process
Layout
A low output rate
Routing &
and, thus, high cost scheduling is tedious
Work-In-Process of item per unit
(WIP) Inventory is and time consuming
usually high in for different products
batch processing
High cost of supervision
Material handling is Disadvantages because of special
time consuming as no treatment to every product
fixed route is there to be processed
Process
Layout
Maintenance cost is The system promotes

Advantages creativity on part of
low because of low
cost general workers due to variety of
purpose machines tasks performed by them
The system is flexible to Breakdown of a machine

design changes in does not lead to halt in
products or processes in production as substitute
comparison to product machines are kept ready
layout for such situations

Schematic Diagram to show Fixed-position Layout of a
Space Shuttle
Raw Computer
Materials Experts
Equipments Assemblies
Technicians Fuel

111 Lathe 2222 Fitting 2222 Paint 111
3333 Machines shop Shop 2222
3333
1 1
1 3 1
1 1
2 1 3 1
1 1
2 1 3
1
2
2222 Drilling 3333 Welding 3333
4444 Foundry 4444 Machines 4444 Shop 4444
Process Layout of a Factory

Manufacturing Cell 1
111 Lathe Drilling Fitting Welding Paint 111
2222222222 Foundry Lathe Fitting Paint 2222
3333333333 Lathe Fitting Drilling Welding 3333
444444444444444444444 Foundry Drilling Welding 4444

Cellular Layout

© Oxford University Press 2013. All Rights Reserved

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

© Oxford University Press 2013. All Rights Reserved

Uploaded by

Copyright:

Available Formats

© Oxford University Press 2013. All rights reserved.

Need for Facility Capacity Planning

To find the optimal capacity of

To keep the initial