Capacity planning

OB

1. S E M I N A R Akhil Lal P MBA- MCMAT Sub:-Capacity Planning

2. Capacity planning; Capacity planning; capacity planning is the process of determining the production capacity needed by an organisation to meet changing demands for its products. Capacity planning concerned with defining the long-term and short-term capacity need of a firm and determining how these needs will be met

3. The need for Capacity planning; Organization decides to increase production Organization decides to introduce new products

4. Capacity planning decisions; Assessing existing capacity Forecasting future capacity needs Identifying alternative ways to modify capacity Evaluate financial, economical and technological capacity alternatives Selecting a capacity alternative most suited to achieve the strategic mission of the firm.

5. Market consideration Resources available Capacity decision Market consideration Resources available Capacity decision Inputs to capacity decisions;

6. Classification of capacity planning; Based on time horizon; -Long term capacity planning -short term capacity planning Based on amount of resources employed; -Finite capacity planning -Infinite capacity planning

7. Long term capacity planning long term or long range capacity planning is concerned with accommodating major changes that affect the overall level of output in the longer run. major changes are; -decision to develop new product line -expand existing facilities -construct production plants

8. Short term capacity planning; Short term or short range capacity planning is concerned with responding to relatively intermediate variations in demand. These kinds of fluctuations in demand caused by seasonal or economic factors. The ways to adjusting capacity; -Use of over time or idle time -Increase the number of shifts -Sub contracting to other firms

9. Finite and Infinite capacity planning; In operations planning, two constraints are time and capacity. If the processing time is not a constraint in case where products are produced to stock and sell – Finite Time is the primary constraint and plan backwards to accommodate these times. Is called infinite capacity planning

10. Factors affecting capacity planning; Controllable factors; -Amount of labour employed -Facilities installed -Shift work per day -Over time work -Sub contracting -shift worked per week -Preventive maintenance -Number of production set-ups

11. Less controllable factors; -Absenteeism -Labour performance -Machine break-down -Material shortages -Scrap and rework -Unexpected problems (strike, fire accidents)

12. Thanks.....