a. Differentiate between design capacity and capacity utilization. b. Briefly describe three capacity expansion strategies. c. An airline company must plan its fleet capacity and long-term schedule of aircraft usage. For one flight segment, the average number of customers per day is 70, which represents a 65 percentage utilization rate of the equipment assigned to the flight segment. If demand is expected to increase to 84 customers for this flight segment in three years, and management requires a capacity cushion of 25 percent, calculate the following:- i. the planned capacity requirement. ii. the maximum number of customers the flight segment can accommodate. iii. the efficiency rate of the flight segment assuming that the current effective capacity of the flight segment is 93 customers.
Breakeven Analysis
Break Even Analysis is a term used in business, cost accounting and economics. It refers to a point where the total cost incurred becomes equal to the total revenue earned. Break Even Analysis determines the number of units to be sold to earn the revenue required to cover the total costs. Total cost is a sum total of fixed and variable costs.
Process analysis
The term process analysis can be defined as breakdown of production process into different phases that converts inputs into output. A series of routine activities are incorporated using organizational resources with a view to achieve operational excellence.
QUESTION 4
a. Differentiate between design capacity and capacity utilization.
b. Briefly describe three capacity expansion strategies.
c. An airline company must plan its fleet capacity and long-term
flight segment, the average number of customers per day is 70, which represents a 65 percentage
utilization rate of the equipment assigned to the flight segment. If demand is expected to
increase to 84 customers for this flight segment in three years, and management requires a
capacity cushion of 25 percent, calculate the following:-
i. the planned capacity requirement.
ii. the maximum number of customers the flight segment can accommodate.
iii. the efficiency rate of the flight segment assuming that the current effective capacity of the
flight segment is 93 customers.
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