Analyzing the capacities including the rates of production, the amount of physical space and needs for equipment and people. At what level of capacity are these processes operating?
- What are some of the possible bottlenecks?
- What impact does the forecast have on future capacity needs?
- What are the implications if the forecast is inaccurate is too high or too low?
- What are some possible ways of increasing capacity and what are the implications for the short term and long term such as costs and investment in capital?
- What would be a plan for the capacity situation?
See the attached file.
Processes operating at a high rate are said to be operating at undercapacity. It is believed that when utilization rises above somewhere between 82% and 85%, price inflation will increase. Excess capacity means that insufficient demand exists to warrant expansion of output. Thus, the companies cannot increase their output without incurring additional fixed costs to purchase new machinery or build new facilities.
The largest possible bottleneck operations are the processes that take the longest time. (i.e. Sponges). By shortening the process time within bottleneck processes, the total process time may be reduced.
Forecasting will ...
The solution analyzes the capacities including the rates of production, the amount of physical space and needs for equipment and people.