How to Measure Capacity, Three Definitions of Capacity, Maximum capacity, effective capacity, Demonstrative Capacity, Guidelines for Calculating Capacity,

2. Measuring Capacity.
 There is no universally accepted way to measure capacity.
 Most systems measure it in term of there outputs.
 But there are situations where the input measurements provide better explanations.
 Unit of measure varies from situation to situation.
ie:
1. John Deere’s Cotton Picker Plant.
2. What Is collage capacity?
Number of Instructors, classroom space, or demand of courses.
If / Then
Number of class times, classrooms, sizes of classrooms.
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POM
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3. In 1999 ( CSU ) Announced That, they would not build new classrooms for new students.
Its proposed solution was to better use of “underutilized” classrooms. So they identify that:
Before 7:30 AM each morning and after 9:30 PM in the evening.
► Between 4:30 and 6:00 PM each day.
► On Fridays, Saturdays, and Sundays.
► During the summer months and during holidays.
Reasons:
► Students often drop a course after the start of a course.
► Individual faculty may not always welcome late arriving students even when space is available.
► The mix of courses taught does not always match what the students want to take.
► Inflexible resources.

4. Three
Definitions
of Capacity
Maximum Capacity
Effective Capacity
Demonstrated Capacity

5. Maximum Capacity
 Defines highest rate of output a process or activity can achieve.
 Operations managers calculate the maximum or designed capacity of a process
based on
 This calculation requires some very important simplifying assumptions.
o Equally Skilled Workers.
o No loss of time.
o No loss of capacity due to machine Breakdown.
o No loss of capacity due to Maintenance.
o No overtime work.
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 Number and duration of available shifts.
 Employees per shifts
 Number of available machines
 Working days in the period of calculation.

6. Effective Capacity
 Identifies the output Rate that managers expect for a given activity or
process.
 Effective capacity normally falls short of maximum capacity by some amount.
o Operations managers plans to operate their systems at less than 100% of maximum
capacity for several good reasons.
o Accommodate unexpected demand.
o Allow time for preventing maintenance and other activities that support capacity.
o Unexpected Breakdown.
o Employ capacity Efficiency
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POM
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7. Demonstrative Capacity
 Deals with actual rather than planned production.
 i.e., It measures the actual level of output for a process or activity over a period of
time.
 Operations managers calculate demonstrated capacity by using average experience
over a period of time
 In this case, the demonstrated capacity would be:
Average hours = 2955/5 = 591 hrs/ week
Work Center 123 Observation Period: 5 weeks beginning July 12, 1999
Week Observed Output
1. (beginning July 12)
2. (beginning July 19)
3. (beginning July 26)
4. (beginning August 2)
5. (beginning August 9)
Total hours (capacity)
620 hrs.
580
635
570
550
2,955 hrs.
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POM
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136

8. Demonstrated
capacity differ
from maximum
& effective
capacity for
many reasons.
 Product Mix
 Operator Skills and experience
 Conditions of Equipment
 Types of jobs
 Inaccurate production standards
 Quality of materials
 Other Factors
o Starvation
o Blockage
o Production yield problems
o Time spent on training

9. Some Ways to express Effective capacity
 Top Down Measures:
If a process has a maximum capacity of = 840 Hrs/Week
And Management want to maintain Cushion = 20 %
Then Effective capacity equals = 848 × 80 %
= 672 Hours
► Or calculates effective capacity as a function of maximum capacity, efficiency, and utilization.
Maximum capacity = Hours/Week
Efficiency = Standard time/Actual time
Utilization = Actual hours possible /Scheduled available hours
Then effective capacity is the product of these three terms.
Effective Capacity = Maximum Capacity x Efficiency x Utilization
( The capacity cushion is the amount of spare capacity a business has
expressed as a percentage of the total capacity )
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10. Guidelines
for
Calculating
Capacity
Step 7
Compare the Demonstrated, Effective, & Maximum Capacities
and Take the Appropriate Actions.
Step 6 Determine the Demonstrated Capacity
Step 5 Identify the Effective Capacity for the Overall Process
Step 4 Identify the Maximum Capacity for the Overall Process
Step 3 Establish a Common Unit
Step 2 Establish the Time Period
Step 1 Describe the General Flow of Activities within the Process
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• Reduce the input
rate
• Increase the upper
limit by adding
resources
• Evaluate current
use of capacity
• Do Nothing

11. “
”
Thank You
Any Query ?