CAPACITY PLANNING

WHAT IS CAPACITY
PLANNING?
It is the procedure used to conclude how
much capacity is needed to construct
greater product or begin product. The
method is needed to achieve maximum
firm performance.
 4 TYPES OF CAPACITY PLANNING

1
Long Term 3
Finite Capacity
Capacity Planning Planning

2 Short Term 4 Infinite Capacity

Capacity Planning Planning
Long Term Capacity Short Term Capacity
Planning Planning

is the process of ensuring that sufficient concerns issues of scheduling, labor

production resources are available to shifts, balancing resource capacities. It's
meet an organization's long range goal is to handle unexpected shift
production needs. demands in an ancient economic manner.

Finite Capacity Planning Infinite Capacity Planning

a production planning method that a method of planning production that

assumes available capacity is a definite leave orders on the existing dates and
constant, thereby identifying the actual shows whether the load on a resource is
capacity limits of your production over or under its defined capacity,
facility. without recommending changes.
 4 TYPES OF CAPACITY PLANNING
TECHNIQUES
Capacity Planning
1 3
Resource Profiles
using Overall Factors
(CPOF)

2
Capacity Bills 4 Capacity Requirements
Planning (CRP)
Capacity Planning using
Capacity Bills
Overall Factors
this technique takes Bill of Material used
it is a C2 software system that allows
and parts produce, work center setup
commanders to maintain top sight over
andactual run times and computes
thebattlefield; collaborate with superior,
capacity by multiplying the number of
peers and subordinates over live data;
units required by thetime needed to
andcommunication their intent.
produce each.
Capacity Requirements
Resource Profiles
this method is one of the techniques that
The process of determining the production
can be used for a company’s resource capacity needed by an organization tomeet
requirements planning. Includes the time- changing demands for its products. In the
phased profile of the capacity context of capacity planning, design capacityis
requirements foreach end item. the maximum mount of work that an
organization is capable of completing in a given
period.
MASTER
PRODUCTION
SCHEDULING
The process of master production
scheduling involves the planning of
activities to determine whether or
not an operation can achieve the
production objectives mentioned in
the MPS. Material Requirements
Planning (MRP) and Capacity
Requirements Planning (CRP) are
the two planning activities that are a
part of the master production
scheduling process.
Aggregate Planning
it is a process of developing,
analyzing and maintaining a
preliminary, approximate
schedule of the overall
operations of an organization.

Aggregate Plan
contains targeted sales forecast,
production levels, inventory levels
and customer backlogs. Is an
attempt to balance capacity and
demand in such a way that cost is
minimized.
Steps taken to produce and aggregate plan:

• Determinant of demand
• Determinant of current capacity
 AGGREGATE PLANNING
STRATEGIES
• Level Strategy- seeks an aggregate plan that
maintains a steady production rate and employment
level.

• Chase Strategy- referred to as demand matching

because the strategy varies production to meet
demand.
TECHNIQUES FOR AGGREGATE PLANNING
• INFORMAL TRIAL AND ERROR
TECHNIQUES
is a method of reaching correct solution or satisfactory result by trying
out various means or theories until error is sufficiently reduced or
eliminates.

Mathematical Techniques- symbol used in all branches

P – Product
of mathematics a formula or to represent a constant. A T – Time
mathematical concept is independent of the symbol OT – Over Time
chosen to represent it. X - Female
• Operations Scheduling- establishing time and resources.

• Forward Scheduling- manufacturing items as soon as possible before the due

date.

• Backward Scheduling- make their items available at the last possible available

period before the due date.

• Loading- assigning jobs to work centers and various machines.

• Infinite Loading- schedules work ignoring the capacity limits.

• Finite Loading- schedules work up to fixed amount of capacity.

Priority rules or heuristics that can be used to select the order of
jobs waiting for processing:

• Random (R)
• First Come/First Served (FC/FS)
• Shortest Processing Time (SPT)
• Earliest Due Date (EDD)
• Critical Ratio (CR)
• Least Work Remaining (LWR)
• Fewest Operations Remaining (FOR)
• Slack Time (ST)
• Slack Time per Operation (ST/O)
• Next Queue (NQ)
• Least Setup (LSU)
• Load Chart- displays the loading and idle times for
machines or departments

• Schedule Chart- is used to monitor job progress

 DETERMINATION OF EQUIPMENT
REQUIREMENTS

1 Equipment Selection- identifying suitable

equipments for production.

2 Batch Production- produces multiple units in

a series.

3 Mass Production- produces a larger-sized

products at a time.
• They have a long-term
impact.
DETERMINATION OF
• Capacity determines the CAPACITY
selection of appropriate
technology, type of labor
andequipments, etc.
• Right capacity ensures
commercial viability of the
business ventures.
• Capacity influences the
competitiveness of a firm.
MEASURING
CAPACITY
• An estimate of demand for
each period in the planning
horizon, expressed by the
number of acceptable or good or
conforming units needed per
period, and obtained from a
detailed demand forecast.
• An estimate of processing time
for the work station where the
equipment willbe used
Usually obtained by one of the work
measurement methods:
Let the following:
P - Production rate of work station in units of
output
T - Processing time per unit in minutes
D - Duration of the period in hours
(For three shift, D =8; D=16; and D=24)
E - Efficiency of equipment expressed as 5% of
running time per period
N - Number of machines required by work station
The requirements base formula is:
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