chapter 10 operations management
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Created by:
somethingav on November 26, 2011
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18 terms
Terms | Definitions |
|---|---|
 capacity | is the capability of manufacturing or service resource such as a facility, process, workstation, or piece of equipment to accomplish its purpose over a specified time period. |
| capacity planning | establishes overall level of productive resources for a firm. Determines which level of capacity to operate at to meet customer demand in a cost efficient manner. |
| Balancing Capacity and demand | too much capacity-- cost rise too little capacity -- customers are lsot |
| Capacity Expansion strategies | timing of capacity expansion in relation to steady growth in demand |
| capacity increase depends on | volume and certainty of anticipated demand, strategic objectives, cost of expansion and operation |
| best operating level | % of capacity utilization that minimizes unit cost |
| Capacity cushion | % of capacity held reserve for unexpected occurrences 100% - Averaged resource utilization % = this |
| long range capacity planning | greater than one year planning horizon, facility location |
| intermediate range planning | six to nine months, aggregate capacity |
| short range planning | one to less than six months, scheduling |
| economies of scale | it costs less per unit to produce high levels of output |
| diseconomies of scale | it cost more per unit to produce higher levels of output |
| focused factory | a way to achieve economies of scale without extensive investments in facilities and capacity by focsing on narrow range of goods and services, target market segments, and dedicate processes to maximize efficiency and effectiveness |
| lead strategy | capacity increases before demand |
| lag strategy | capacity increases after demand |
| average | alternates between lead and lag strategy |
| incremental expansion | capacity increases and demand follows before capacity |
| one step | capacity greatly increases before demand |
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