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Related Flashcards
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Cards In This Set
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Capacity
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The amount of output that a system is capable of achieving over a specific pd of time
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Managing _______ ________ is critical in operations of all businesses
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Productive capacity
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Basic capacity questions
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What kind of capacity is needed?how much is needed?when is it needed?
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Speculative
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Forecast
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Responsive
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Demand
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Real (effective) capacity
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What is to be produced
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Long range capacity planning
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> 1 yrbuildingsinvest in new facilities and equipment or not?large capital expenditures
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Intermediate range capacity planning
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6-18 monthshiring, lay off, minor equip purchase
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Short range capacity planning
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1 month or less
eliminate variance between planned vs. actual outputovertime, personnel transfers |
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Strategic capacity planning
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Determining the overall capacity level or capital intensive resources that best supports the company's long-range competitive strategy
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Best operating level
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Level of capacity for which the process was designed and volume output where avg cost per unit is minimized
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Capacity utilization rate=
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Actual output/ best operating level (%)
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Capacity utilization rate
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How close to best operating level
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Economies of scale
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Volume increase, cost/unit decreasespread the fixed costs of building and equip over multiple units
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Diseconomies of scale
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Where cost/unit rises as volume increasesplant too large
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