MOB Capacity Planning

Question 1

What is Capacity?

Answer 1

Capacity is the ability to archive, store, or produce.

Question 2

What is capacity planning?

Answer 2

Capacity planning refers to the determining of production capacity a company needs to meet the changing demands of its products and services

Question 3

What does the term Strategic Capacity Planning refer to?

Answer 3

Strategic Capacity Planning refers to the technique used to identify and measure the overall capacity of production

Question 4

Why is Strategic Capacity Planning needed?

Answer 4

• Helps keep operating costs at minimum level without affecting quality
• Helps organization keep a competitive edge and achieve long term growth
• Helps the organization meet its future requirements

Question 5

What does the term Design Capacity refer to?

Answer 5

Design Capacity refers to the maximum output achieved under ideal working conditions

Question 6

What does the term Production Capacity refer to?

Answer 6

Production Capacity refers to the maximum output achieved under normal working conditions

Question 7

What does the term Sustainable Capacity refer to?

Answer 7

Sustainable Capacity refers to the maximum output achieved under realistic working conditions

Question 8

What does the term Effective Capacity refer to?

Answer 8

Effective Capacity refers to the maximum output achieved under pre-defined working conditions

Question 9

What is the Effective Capacity formula?

Answer 9

Actual output - design capacity
Then
Actual efficiency rate output/Effective Capacity

Question 10

What is the capacity utilization formula?

Answer 10

Actual output/Design Capacity

Question 11

How to Capacity Utilization?

Answer 11

1. Increased Marketing
2. Rationalization
3. Subcontracting
4. Redeployment

Question 12

What are some advantages of operating at full capacity?

Answer 12

1. Average costs will be minimized because fixed cost will be spread across the units of output
2. Workers will be motivated as they feel more secure in there job
3. A busy operation can improve thee company’s image

Question 13

What are some disadvantages of operating at full capacity?

Answer 13

1. Strain on resources
2. Rigid/No flexibility
3. Insufficient time for training