Ops Management Study Guide Essay

Capacity Planning
• Capacity planning – changing capacity to match anticipated workloads
• Production scheduling – arranging workload to fit planned capacity
• Workload variability o The extent the workload is variable
• Capacity of variable resources increase and decrease to match the workload
• Capacity of fixed resources must cover peak workload requirements…and will be underutilized during non-peak periods
• Workload leveling o The extent we can level the workload
• Reduce the need for flexible resource capacity
• Reduce peak workload
• Reduced fixed capacity requirement
• Reduce under-utilization during non-peak periods
• Backlogging demand – pushing workload to a later period (i.e. period 1 workload pushed to periods 2 and 3)
• Forward production – producing ahead of time (i.e. period 3 workload done in periods 1, 2, and 3)
• Long range o Capacity planning o Fixed resources o Planning changes in capacity of less flexible resources o Significant uncertainty o Aggregated planning units
• Short range o Production scheduling o Planning use of existing capacity of less flexible resources o Capacity planning for more flexible resources o Less uncertainty, greater planning detail
• What decisions must be made long range (while critical info is still unknown)?
• What decisions could be made later, in the short term (after critical info becomes known)?
• Issues for long range capacity planning o Fixed vs. variable costs, breakeven point o Capacity “chunks” – sizing and timing o Capacity “cushion” – utilization vs. responsiveness o Peak capacity requirements, coverage
• Workload smoothing techniques
• Capacity planning tools o Breakeven point – fixed vs. variable costs, total cost vs. revenue o NPV analysis – size and timing of capacity increments o Payoff tables – single-stage decision making under uncertainty (newsboy problem) o Decision trees – multi-stage decision making under uncertainty o Queuing models and simulation – system capacity, resource utilization vs. responsiveness
• Required volume to generate a specified profit o Q = (Specified profit + FC) / (Rev per unit – VC per unit)
• Breakeven point o BEP = FC / (Rev per unit – VC per unit)

Aggregate Demand
• Chase demand vs. level production
• Anticipation inventory
• Planning capacity changes in anticipation of projected aggregate workload
• May involve long range workload leveling though seasonal (anticipation) inventory buildup
• Used to plan changes in capacity of more flexible resources, like the number of shifts run, use of temporary workforce, outside contracting, etc.
• Based off of total workload from all products
• Production quantities are balances against an aggregate demand forecast for each product group, resulting in a projections of anticipation inventory levels
• Anticipation inventory allows a smooth production schedules even though demand varies
• Fixed resources form constraints on the range of feasible solutions
• Level production – constant month-by-month aggregate product level, despite variability in projected demand o Maintains constant workload o Avoids capacity change costs o Uses anticipation inventory to smooth out month-by-month variation in workloads
• Chase demand – productions levels vary month-by-month to match demand o No inventory buildup o Either change capacity up and down as workload goes up and down, OR maintain capacity at a level sufficient to cover the peak monthly workload
• A decision to increase or decrease machine capacity would require a longer planning horizon, and is essentially a different problem cuz it’s more of a permanent decision
• Workload leveling – planning production quantities to maintain a constant workload while building inventory for later periods of high demand
• Capacity adjustment – changing the number of shifts in order to provide sufficient capacity for varying production levels

MRP
• Capacity planning to production scheduling (long

Show More

Business Ethics and Op Essay

Emergency Medical Treatment And Active Labor Act

Lls Taxonomy Analysis

Information Security Essay examples

Essay on Economics and California Management Review

Essay about Mintzberg 5 Ps of Strategy

Essay on Advertising and Finance Marketing Operations

Military Essay

Toronto CREW Real Jobs Resource Guide 2013 Updated - JSM Essay

Dept Of Accounting And Corporate Governance