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    Om l5 Capacity Management

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    Athah
    The document discusses capacity management in operations management. It begins by outlining key questions around capacity management, including defining capacity, measuring demand and capacity, setting base capacity levels, and reconciling mismatches. It then discusses measuring capacity in different operations, the differences between design, effective and actual capacity. The document also outlines various ways to cope with mismatches, such as absorbing demand, adjusting output, or changing demand. Specific examples of a queuing system and Blackberry Hill Farm are also provided.

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    Om l5 Capacity Management

    Uploaded by

    Athah
    78 views31 pages
    The document discusses capacity management in operations management. It begins by outlining key questions around capacity management, including defining capacity, measuring demand and capacity, setting base capacity levels, and reconciling mismatches. It then discusses measuring capacity in different operations, the differences between design, effective and actual capacity. The document also outlines various ways to cope with mismatches, such as absorbing demand, adjusting output, or changing demand. Specific examples of a queuing system and Blackberry Hill Farm are also provided.

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    The document discusses capacity management in operations management. It begins by outlining key questions around capacity management, including defining capacity, measuring demand and capacity, setting base capacity levels, and reconciling mismatches. It then discusses measuring capacity in different operations, the differences between design, effective and actual capacity. The document also outlines various ways to cope with mismatches, such as absorbing demand, adjusting output, or changing demand. Specific examples of a queuing system and Blackberry Hill Farm are also provided.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    78 views31 pages

    Om l5 Capacity Management

    Uploaded by

    Athah
    The document discusses capacity management in operations management. It begins by outlining key questions around capacity management, including defining capacity, measuring demand and capacity, setting base capacity levels, and reconciling mismatches. It then discusses measuring capacity in different operations, the differences between design, effective and actual capacity. The document also outlines various ways to cope with mismatches, such as absorbing demand, adjusting output, or changing demand. Specific examples of a queuing system and Blackberry Hill Farm are also provided.

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    Lecture 6

    MBF2213 | Operations Management


    Prepared by Dr Khairul Anuar

    L6: Capacity management

    1
    Capacity management
    Key questions

    Capacity management – Slack et al. identify the following


    key questions…

     What is capacity management?


     How are demand and capacity measured?
     How should the operation’s base capacity be set?
     What are the ways of coping with mismatches between
    demand and capacity?
     How can operations understand the consequences of
    their capacity decisions?
    What is capacity?

     Capacity in the static, physical sense means the scale of an


    operation.

     But this may not reflect the operation’s processing capability.

     So we must incorporate a time dimension appropriate to the use


    of assets.

    • For example 24,000 litres per day.

    • 10,000 calls per day.

    • 57 patients per session.

    • Etc.
    Measure aggregate demand and capacity
    Understand changes to demand and capacity

    Determine the operation’s base level of


    capacity

    Identify and select methods of coping with


    mismatches between demand and capacity

    Understand the consequences of different


    capacity decisions Forecast
    Aggregated output

    demand

    Estimate of current capacity

    Time
    Operation Input measure of capacity Output measure of capacity

    Air-conditioner Machine hours available Number of units per week


    plant
    Hospital Beds available Number of patients treated per
    week
    Theatre Number of seats Number of customers entertained
    per week
    University Number of students Students graduated per year
    Retail store Sales floor area Number of items sold per day
    Airline Number of seats available on Number of passengers per week
    the sector
    Electricity Generator size Megawatts of electricity
    company generated
    Brewery Volume of fermentation Litres per week
    tanks

    Note: The most commonly used measure is shown in bold.


    Design capacity, effective capacity, and actual output
    The nature of aggregate capacity

    Aggregate capacity of a hotel:


    - rooms per night;
    - ignores the numbers of guests in each room.

    Aggregate capacity of an aluminium producer:

    - tonnes per month;


    - ignores types of alloy, gauge and batch variations.
    Causes of seasonality

    Climatic Festive Behavioural Political Financial Social

    Construction materials Travel services


    Beverages (beer, cola) Holidays
    Foods (ice-cream) Tax processing
    Clothing (swimwear, shoes) Doctors (influenza epidemic)
    Gardening items (seeds) Sports services
    Fireworks Education services
    Demand fluctuations in four operations
    How capacity and demand are measured

    Actual output
    Efficiency =
    Effective capacity

    Planned loss
    Design of 59 hours
    capacity

    Avoidable loss –
    Effective
    58 hours per
    capacity
    week

    168 hours 109 hours Actual output –


    per week per week 51 hours per
    week

    Actual output
    Utilization=
    Design capacity
    Ways of reconciling capacity and demand (1 of 2)
    Ways of reconciling capacity and demand (2 of 2)

    How do you cope with


    fluctuations in demand?

    Absorb Adjust output Change


    Demand to match demand
    demand
    Level Demand
    capacity management
    Chase
    demand
    Absorb demand

    Absorb
    demand
    Have
    excess
    capacity Keep output
    level

    Make
    Make to
    customer
    stock
    wait
    Part finished Queues
    Finished goods, or Backlogs
    Customer inventory
    Adjust output to match demand

    Adjust output to
    match demand

    Hire Fire

    Temporary labour Lay-off

    Overtime Short time

    Subcontract Third-party
    work
    Change demand

    Change
    demand

    Change pattern of demand.

    Develop alternative products and/or services.


    Simple queuing system
    Table 11.3
    Examples of operations which have parallel
    processors
    Blackberry Hill Farm
    Capacity management - long and short-term outlook
    Blackberry Hill Farm (1 of 6)
    Blackberry Hill Farm (2 of 6)
    Blackberry Hill Farm (3 of 6)
    Blackberry Hill Farm (4 of 6)
    Blackberry Hill Farm (5 of 6)
    Blackberry Hill Farm (6 of 6)

    *Technical problems reduced production level.

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