2. What is capacity ?
The throughput or number of units a facility can hold,
receive, store or produce in a period of time.
(e.g. 1 million garments per month)
3. Capacity
Management
The ability to meet a customer’s requirements with the
available resources (machinery, labour, raw material
etc.) at hand.
Capacity planning is done on the basis of projections for
future product demand, labour and equipment's
requirements.
Time and capacity are the two main constraints in
capacity management.
4. Rough cut
capacity planning
It calculates a rough estimate of the workload placed on
critical resources by the proposed MPS.
Critical resources include bottleneck operations, labor
and critical materials.
Basically there are three approaches to perform rough
cut capacity planning:-
1. Capacity planning using overall factors
2. “Bill of labor” approach
3. “Resource Profile” approach
5. Capacity
requirement
planning
(CRP)
It is the process by which a company figures out how
much it needs to produce, and determines if it is capable
of meeting those production goals.
Small businesses must conduct capacity requirements
planning regularly to keep up with changes in supply
and demand.
Depending on the industry and type of businesses,
capacity requirements planning can happen monthly,
quarterly or annually.
6. Capacity
requirement
planning
(CRP)
It is necessary to set the capacity after considering the
current situation, in order to make Capacity requirements
Planning more practical.
In this planning, the following three capacities are
used:
1. Standard Capacity
2. Maximum Capacity
3. Set Capacity
7. Effect of poor
CRP
Not being able to meet customer demand will often mean
losing customers to competitors.
Poor capacity requirements planning can also lead to
over-production of products that do not sell.
This unused inventory ties up the company’s revenue and
depresses reported earnings.