Evaluation Of The Beck 's Efforts

What is capacity utilization at every step in the process? What is the direct resource utilization?

Ignoring capacity was an issue. By doing that, if maxim capacity was reached, there was a huge possibility of backordering and that would translate in decrease of velocity, inaccurate planning and worse: unhappy customer. Capacity should considered into forecast and planning.

The objective of strategic capacity planning is to provide an approach for determining the overall capacity level of labor-intensive resources.

increase, throughput increases exponentially thereby creating an inefficient operation and limiting profitability. Based upon this evaluation, Team A decided that it was prudent to purchase another tuning machine for Station 3 as soon as the cash balance reached $175,440 ($100,000 machine cost, $74,440 raw material cost, $1,000 order cost). Due to Station 1 often hitting 100% utilization, Team A decided to evaluate the need to purchase another board stuffing machine in the future.

Capacity is the maximum amount capable of producing. Another why to expand the capacity is to consider outsourcing. Outsourcing would come into play when they cannot set up the equipment and they need to produce product to satisfy an order. Some things to consider are the cost of making the product, such as labor, raw materials, and overhead.

In order to find the capacity system, we are able to take the lowest number in units, of course after the reject rate, which for this case is produced by the grinding with 2,128 units. Therefore, because we are unable to produce more units due to reaching the capacity mark, or for no more product to be allowed through in the completed cycle. Thus, the capacity system turns out to be 2,128 units. “Capacity utilization and machine scheduling also reflect tactical

Schroeder, Goldstein, and Rungtusanatham said “capacity can be measured in terms of output measures such as numbers of units produced, tons produced, and number of customers served over a specified period.” As organizations are built part of their discussion panel is to determine the amount of people they anticipate on serving.

So as what Jonah claimed, every factory has bottlenecks and bottlenecks are a must. It is impossible to set up a model perfect balancing capacity with demand. The variation and dependent events will cause the bottleneck to move from operation to operation in different stages. What the company should do is to balance the flow with demand, not the capacity with demand. And the company should adjust strategies to deal

3. How does demand variability impact capacity issues at LAA? What can the company do to control variability in demand?

There are constraints on capacity management and these are normally Time and Capacity. Time may be a constraint where a customer has a particular required delivery date. In this situation, capacity managers often "plan backwards". In other words, they allocate the final stage (operation) of the production tasks to the period where delivery is required; the penultimate task one period earlier and so on. This process helps identify whether there is sufficient time to meet the production demands and whether capacity needs to be increased, albeit temporarily.

These two bottlenecks constrained the whole process. Alex and his colleagues were happy to identify two "Hebie"s, NCX-10 and Heat Treatment Department, which bottlenecked a flow sufficient to meet demand and make money. So the only thing to do was to find more capacity. To increase the capacity of the plant was to increase the capacity of only the bottlenecks. To increase the capacity of bottlenecks did not mean to install new machine, but to find the hidden capacity. With the help of Jonah, Alex found the NCX-10 had 1-hour idle time, as the union contract stipulated that there must be a half-hour break after every four hours work. The hours lost in the breaks of NCX-10 were enormously expensive because the throughput for the entire plant had been lowered by the bottleneck. The problem of the second "Hebie", heat treat, was that they didn 't make the bottleneck work on the parts contributed to throughput and many products were unable to be shipped without the parts in pile for treatment. What was more, they only did most inspections prior to final assembly but never inspected the parts before bottleneck. It easily let defects go through bottleneck and lost time in the bottleneck could not be recovered. The cost of one hour lost in these two bottlenecks is the cost of an hour lost in the system, which is computed as the total expense of the system divided by

Capacity planning is a necessary function of an organization to ensure that the highest rate of output is reached through the current processes taking place within an organization. These strategically defined processes must have the ability to provide flexibility to meet future capacity demand, whether due to opportunity growth or adjustments to make decreases to maximize profits. “Capacity decisions related to a process need to be made in light of the role the process plays within the organization and the supply chain as a whole, because changing the capacity of a

Capacity utilization is defined as the ratio between the actual output produced and the potential output that can be produced in the plant. The comparison between the 6 plants is as follows:

There are three initial portions of capacity planning and they are considered to be the productive, nonproductive and the idle. Productive capacity is where products are being produced well; Non-productive capacity is where the products are not being produced at that specific time such as when

NOTE: In this case study, I have named the machines Machine 1, Machine 2 and Machine 3, where Machine 1 has the highest capacity, followed by Machine 2 and Machine 3.