1. 1 Ardavan Asef-Vaziri Feb-2013Capacity- Basics Capacity  Case: Scharfen Berger Chocolate Maker  Throughput (Average Flow Rate): Average # of flow units that flow through the process per unit of time  Capacity : Maximum Throughput Effective Capacity: Inverse of the unit load  Unit Load: Average time required to process a flow unit Theoretical Capacity: Highly idealized, seldom attainable  Maximum flow rate without any waste.  Capacity affects process performance Too little  long waiting times/lost sales Too much  high cost/inefficiency

2. 2 Ardavan Asef-Vaziri Feb-2013Capacity- Basics  Long-Term (Multi-year, strategic) Facility (manufacturing, distribution, warehousing) planning  Number, scale, location Equipment acquisition ?  Intermediate (Quarterly or monthly) Production and workforce planning Resource allocation  Short-Term (Weekly or daily, tactical) Due date assignment Material requirements planning Job or workforce scheduling Capacity Decisions

3. 3 Ardavan Asef-Vaziri Feb-2013Capacity- Basics Mortgage Application Credit rating Kiki 15min Verify/Check Employment etc Marcus 20min Initial policy options/rates Maxi 15min Assemble, Present to client Karolien 15min Application review, Data entry Shannon 5min Spot the bottleneck!

4. 4 Ardavan Asef-Vaziri Feb-2013Capacity- Basics Capacity Analysis Factors affecting system capacity  Multiple products with same process requirement (batch process) Product mix Setup times Lot size

5. 5 Ardavan Asef-Vaziri Feb-2013Capacity- Basics Process Layout of a Medical Center Neurology (5) Waiting Area (1) X-Ray (2) Orthopedic care (3) Cardiology (4) Intensive care (6) Patient Routing Mix Type A 1,2,3 40% B 1,4,6 30% C 1,2,5 20% D 1,2,6 10% Can Handle (Patients/week 11000 2420 3250 3300 5300 6600 What is the capacity of this system Neurology (5)

6. 6 Ardavan Asef-Vaziri Feb-2013Capacity- Basics Multi-Product Process Chart

7. 7 Ardavan Asef-Vaziri Feb-2013Capacity- Basics Multi-Product Process Chart

8. 8 Ardavan Asef-Vaziri Feb-2013Capacity- Basics  Demand management Pricing, promotion, backordering (appointment)  Production management Inventory pileup, subcontracting, flexible facility design (toll-way)  Workforce management Overtime, hiring/layoff (training?), vacation Cross-training, shift scheduling  Planning capacity utilization Cost vs. time performance  Available options Potential cost and benefits tradeoff http://www.youtube.com/watch?v=3zx4dfqmB3A&feature=related Matching Capacity and Demand