Exam 4: Capacity Planning

The seven-person maintenance function at a hospital performs both preventive and corrective maintenance on hundreds of items each month.All the workers are scheduled for 40 hours per week and there are four weeks in a month.It is the goal of the maintenance department to achieve 90% utilization with a mix of two-thirds preventive maintenance and one-third corrective maintenance.How many hours each month are spent performing corrective maintenance if they achieve their 90% utilization and correct/preventive mix targets?

A company's production facility,consisting of two identical machines,currently caters only to product A.The annual demand for the product is 4000 units.Management has now decided to introduce another product,B,which uses the same facilities as that of product A.Product B has an annual demand of 2000 units.In view of the uncertainties involved in producing two products,management desires to have an overall 10 percent capacity cushion.Given the following additional information,how many more machines are required? (Assume 8 hours/shift,2 shifts/day,250 days/year,and that no overtime is allowed).

When a firm makes a long-term capacity decision,selecting the base case alternative means doing nothing and losing orders from any demand that exceeds current capacity,or incurring costs due to excess capacity.

Although the fire marshal had declared the capacity of the classroom at 55 students,the introduction to operations management class was so popular,the average attendance was 75 students,literally standing room only.Squeals of excitement and the occasional burning of an overturned car accompanied the successful solution of problems such as this: What is the utilization of the operations management professor?

If a system is well balanced,which one of the following changes usually calls for a larger capacity cushion?

The Southeast Manufacturing Company is producing two types of products: A and B.Demand forecasts for next year and other production-related information are provided in the following table: Both of these products are produced at the same workstation,called the Automatic Lathe.Currently,the company has 12 automatic lathes,and financial constraints prevent any expansion for the next year.It works 250 days per year with two 8-hour shifts and desires a 25 percent capacity cushion.Which one of the following alternatives will allow next year's demand to be fully covered?

Although the fire marshal had declared the capacity of the classroom at 45 students,the introduction to operations management class was so popular,the average attendance was 55 students,literally standing room only.Shouts of "You the man!" accompanied the successful solution of problems such as this: What is the utilization of the operations management professor?

The capacity requirement for a year's output is inversely proportional to the total number of hours per year during which the process operates.

Figure 4.1 -A manager weighs three options for capacity cushion as depicted in Figure 4.1.If the dollar amounts expressed in the figure are cash flows,what is the value of the optimal decision?

One reason economies of scale drive down cost is the spreading of fixed costs.

Capacity decisions should be linked closely to ________ and ________ throughout the organization.

Lucy's Pancake House,a no-frills diner along a major interstate,has discovered that if precious employee time is not wasted on frivolous duties such as cleaning work surfaces,properly storing ingredients,and pest control,they can achieve an average output rate of 25 customers per hour.If the diner was designed to accommodate a maximum of 30 customers per hour,what is the utilization?

An expansionist capacity strategy involves large,infrequent jumps in capacity,where a wait-and-see strategy involves smaller,more frequent jumps.

________ is the maximum rate of output for a process.

Utilization is the degree to which equipment,space,or labor is currently being used.

Long-term capacity plans deal with:

As the desired capacity cushion increases,the processing hours required for a year's demand decrease.

Figure 4.1 -A manager weighs three options for capacity cushion as depicted in Figure 4.1.If the dollar amounts expressed in the figure are costs,what is the optimal decision?

Cash flow is the difference between the flows of funds into and out of an organization over a period of time.

Table 4.1 The Union Manufacturing Company is producing two types of products: A and B.The demand forecasts,batch size,and time standards follow: Both products are produced on the same machine,called Mark I. -Use the information in Table 4.1.How many Mark I machines are required to produce Union Manufacturing's for the year's production?