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Capacity Plans

UPS is considering 2 capacity plans for package sorters. The first is for 600 packages per hour and the second if for 680 for UPS's one shift per day operation. The two plans are tried out against actual per hour business volume for the past 5 weeks as follows:

Actual Plan 1 Plan 2
Week Packages per Excess Excess
Hour Capacity Capacity

1 510 90 170
2 490 110 90
3 780 -180 -100
4 540 60 140
5 700 -100 -20

A teams analysis of the plans reveal:

a. Plan 1 will have maximum excess capacity of 180 packages per hour
b. Plan 1 is most likely to meet guarantees
c. Plan 2 will have a maximum backlog of 170 packages per hour
d. Plan 2 might meet guarantees by working overtime.

Please explain

Solution Summary

Evaluates two capacity plans.

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