production capacity vishal

8/7/2019 Production Capacity vishal

1/15

CAPACITYCAPACITY

PLANNINGPLANNING

PRESENTED BY:

VISHAL KAPOORMBA

ROLL NO. - 310023


2/15

What is Capacity?What is Capacity?

y Capacity is the limited capability to

produce an output over a period of time.

y It is the rate of productive capability of a

facility.

y Capacity is the maximum rate of output

for a process.


3/15

Capacity PlanningCapacity Planning

y Capacity plannig is concerned with

defining the long-term and short-term

capacity needs of an organisation and

determining how those needs will besatisfied.

y It is a decision based upon the consumer

demand and this is merged with thehuman, material and financial resources of

the organisation.


4/15

Levels of Capacity plansLevels of Capacity plans

Long term capacity plan

( it covers at least two years in future)

(e.g. investment in new facilities and equipments)

Short term capacity

(it covers week-to-week operation)

(e.g. it focuses on workforce size, overtime

budgets, inventories, etc)


5/15

Measures of capacityMeasures of capacity

y The capacity of the manufacturing unit can be

expressed in number of output per period.

y Measuring capacity is more complicated when

manufacture multiple products in such case thecapacity is expressed as man-hour or machine

hour.


6/15

Types capacityTypes capacity

y Design capacity

Design capacity of a facility is the planned or

engineered rate of output of goods or services

under normal or full scale operating conditionsy System capacity

System capacity is the maximum output of the

specific product or product mix the system of

worker and machine is capable of producing as

an integrated whole


7/15


8/15

What is capacity utilization?What is capacity utilization?

y Capacity utilization is the degree to whichequipment, space, or labour is currently beingused.It is expressed as a percent.

y Mathematically, it can be expressed as under:

y tilization = [Average output rate/Maximum capacity] %100

y The unit of measurement for both Numerator

andD

enominator should be same.


9/15

y Utilization indicates the need for adding extra

capacity or eliminating unneeded capacity.

Two definitions of maximum capacity, i.e.:

y Peak capacity and

y Effective capacity


10/15

y Peak capacityThe maximum output that a process or facilitycan achieve under ideal conditions is called peakcapacity.

It can be sustained only for a short time, fewhours a day or few days in a month.

A process reaches it by using marginalmethods of production, such as excessiveovertime, extra shifts, temporarily reducedmaintenance activities, over shifts, andsubcontracting.


11/15

y Effective capacity

The maximum output that a process or firmcan economically sustain under normalconditions is its effective capacity.

In some organizations, effective capacityimplies a one-shift operation; in others, it

implies a three-shift operation.


12/15

Factors that determine capacityFactors that determine capacity

Process design - In multistage productionprocesses the maximum rate of output that can beachieved is governed by the slowest) lowestcapacity stage.

Prod

uctde

sign - With exactly the samepersonnel and equipment, the capacity for making aproduct that is well designed for production will begreater than for a poorly designed one.

Product variety - The fewer types of products

made by a production unit and the more similarthey are, the more specialized equipment and jobscan be, and the less time lost on productchangeovers and machine set-ups.


13/15

Product quality - The way products aremade, tested, and inspected will affect the

rate at which products of acceptable qualitycan be produced.

Production scheduling - Scheduling thatkeeps product flows well balanced and

synchronized and unproductive time minimizedwill utilize machines and personnel better andresult in greater effective capacity.

Materials management - Shortages ofmaterials can cause work stoppages, while

excess inventories can cause congestion andwasted time searching for materials.


14/15

y Maintenance - Equipment breakdowns anddefects due to machine wear are two majors

sources of lost production.y Job design and personnel management -

The amount of output a production systemactually produces is greatly determined by thepersonnel operating the system.Inadequate

training, poor job design, overwork, andabsenteeism all lead to lost production.


15/15

production capacity vishal

Documents