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Measuring Capacity: The Basics: By: Cameron Tidwell
Measuring Capacity: The Basics: By: Cameron Tidwell
The Basics
(Blackstone, 1989)
• Beds in a Hospital
12/12/2006 Measuring Capacity 8
What are Possible units of measure
of Capacity for the following?
• A Bottling Company?
– Work Hours, Bottles Filled…
• An Car Dealership?
– Cars sold, Cars serviced…
• What about your Organization?
–?
12/12/2006 Measuring Capacity 9
Let’s Think…
• What is the benefit of knowing capacity?
• Measuring Capacity:
“One averages some set of historical data.”
• Calculating Capacity:
“One sets capacity equal to the product of time available (T),
efficiency (E), and utilization (U).”
C=TxExU
(Blackstone, 1989)
Example:
Louisville Slugger’s factory in Louisville,
KY produced an output of 2700 bats, 2000
bats, 1900 bats, and 2400 bats. What is the
measured capacity?
Example:
Ford has a factory in Detroit which produces
transmissions. The factory has 2 shifts which man
4 machines, 8 hours day, 6 days a week. What is
the factory’s calculated capacity?
• Example cont.
Say that Ford historically has a utilization of
93 % and a efficiency of 98 % then what
would their capacity equal?
12/12/2006 Measuring Capacity 18
Even more Ford cont.
Capacity = T x E x U
*Time Available = 384 hrs *Efficiency = .98 *Utilization = .93
Example:
At company X work is measured in hours.
It took employees 12.75 hours to produce
12 standard hours of work. What is the
companies efficiency?
Example:
Company Y produces a standard of 250
units per hours. Today, in one eight hour
shift the company produced 1925 units.
What was the company’s efficiency for the
shift today?
• Definition:
“A measure (usually expressed as a percentage)
of how intensively a resources is being used to
produce a good or service.”
(APICS Dictionary, 1998)
Utilization = 94.79 %
– Under Utilization:
• Increase Costs
• Employees downtime (standing around)
• Pascoe, S., Greboval, D., Kirkley, J., & Lindebo, E. (2004) Measuring
and appraising capacity in fisheries: framework, analytical tools and
data aggregation. Rome: FAO Fisheries Circular. No. 994