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5. capacity planning.


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Published in: Technology, Business

5. capacity planning.

  1. 1. Introduction Capacity of a facility is referred to as its capability to produce. Capacity is the rate of output from an operating system per unit time. Capacity is based on the output that the system can produce, store and transport.
  2. 2. Distinction between load andcapacity Load and capacity are different from each other. Load is the amount of planned work scheduled and actual work released to a facility, work center or operation for a specific time. Load is usually presented in terms of standard hours of work or units of production. Load is classified as planned load and released load. Planned load is calculated on the basis of work to be done in future period in the work center. Released load is the actual manufacturing order released for production but might not have been carried out at work center.
  3. 3.  Capacity on the other hand is the capability of the system to perform the expected functions. Capacity is also the capability of machine, work center, plant, worker or organisation to produce the output in a time period. In short the amount of work that can be produced by a work center is known as capacity whereas the amount of work that needs to be produced to meet the plans is the load.
  4. 4. Classification of capacity Designed or rated capacity Planned capacity Demonstrated capacity
  5. 5. Designed or rated capacityDesigned capacity is also the maximum capacity, which a facility can achieve. It defines the highest normal outputthat a process could achieve. Designed capacity is usually higher than the normal output rate.The designed capacity of a process is calculated by taking into account the following things.Number of machines availableCapacity of each machineNumber of shifts operatedDuration of each shiftNumber of workdays in the period under consideration
  6. 6.  Capacity of the process is expressed in terms of above factors as shown below: CN1 N2 N3 HC=Capacity of machine per hourN1 = number of machinesN2 = number of shifts per dayN3 = number of days in time periodH= hours in each shift
  7. 7. The above calculations based onfollowing assumptions:The workers have the same efficiencyThere is no loss of time during change overNo machine breakdownPlanned shutdown not includedNo overtimeWork at normal rateNo loss of time due to worker problems
  8. 8. The maximum capacity can bechanged by the following actionsIncrease the no. of machinesIncrease the no. of operating hours in shiftIncrease the no. of shiftsDeploy trained manpowerAvoid loss due to scrap or damagesControl waste time by workersGive incentive for higher productionOutsource part of work load
  9. 9. Planned capacityPlanned capacity is the capacity, which is maintained or achieved in normal operations.Production plans and schedules are worked out based on planned capacity. Planned capacity isusually less than the designed capacity due to following reasons.Unexpected demand from some customersPreventive and predictive maintenance need time and influence the available time for production.Corrective breakdownCannot run at full capacity for so long as even machines need rest
  10. 10. Efficiency= Standard time/ Actual timeUtilization= Actual hours/Scheduledavailable hoursPlanned capacity= Designed capacity Xefficiency X utilization factor
  11. 11. Demonstrated capacity The actual level of output for a process over a period of time is known as the demonstrated capacity. Demonstrated capacity deals with the actual performance over a time rather than the calculated designed capacity or planned capacity. Demonstrated capacity is determined by averaging the recorded figure of actual outputs over a period of time. It might differ from both the designed capacity and planned capacity for various reasons such as
  12. 12. Product mixOperator skill and experienceHealth of machines or equipmentsType of jobsQuality of materialInaccurate standard for process performanceIdling timeBlockagesRejection due to poor qualityTraining time of operatorsOther factor