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OM 6 Strategic Capacity Planning
OM 6 Strategic Capacity Planning
1. Facilities
2. Product and service factors
3. Process factors
4. Human factors
5. Policy factors
6. Operational factors
7. Supply chain factors
8. External factors
Steps in the Capacity Planning
Process
1. Available capacity
2. Expertise
3. Quality consideration
4. The nature of demand
5. Cost
6. Risks
DEVELOPING CAPACITY STRATEGIES
Diseconomies of scale If the output rate is more than the optimal level,
increasing the output rate results in increasing average unit costs.
Reasons for diseconomies of scale include the following:
1.Distribution costs increase due to traffic congestion and shipping
from one large
2.centralized facility instead of several smaller, decentralized
facilities.
3.Complexity increases costs; control and communication become
more problematic.
4.Inflexibility can be an issue.
5.Additional levels of bureaucracy exist, slowing decision making
and approvals for changes.
CONSTRAINT MANAGEMENT