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Capacity Planning in Service vs. Manufacturing

How does capacity planning differ in service and manufacturing organizations?

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Capacity planning is the process by which firms attempt to calculate the amount of production resources needed to fulfill customer demand. Although manufacturing firms and service organizations differ in their business models, capacity planning for manufacturing and service organizations is actual quite similar.

In a typical manufacturing environment, the firm performing capacity planning would estimate customer demand first. After arriving at this goal, they would align their production process in such a manner as to attempt to fill this demand exactly (no shortages, no overages). They would have just enough machinery and equipment on hand to produce what is needed. At every point in the production process, each ...

Solution Summary

Capacity planning in service versus manufacturing organizations is analyzed.