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Monday 8 October 2012

Chapter 5: Capacity Management

Capacity Management

ü  Capacity Management is concerned with supplying the necessary resources.
ü  The question of capacity :
·         How much is available?
·         How much is required?
·         How to balance priority and capacity?
ü  Capacity can be defined as “The capability of a worker, machine, work center, plant, or organization to produce output per time period”.
ü  Two kind of resources:
                                i.            Capacity Available: capacity of a system or resources to produce a quantity of output in a given time period.
                              ii.            Capacity required: the capacity of a system or resources needed to produce a desired output in a given time period.
Capacity Requirement Planning (CRP)

Ø  Work Center File: is composed of a number of machines or workers capable of doing the same work.
Ø  A work center file contains information on the capacity and move, wait, and queue times associated with the center.
Ø  Move time: the time normally taken to move material from one workstation to another.
Ø  Wait time: the time a job is at work center after completion and before being moved.
Ø  Queue time: the time a job waits at a work center before being handled.
Ø  Lead time: The sums of queue, setup, run, wait, and move times.
Ø  Level of capacity:
o   Machine or individual
o   Work center
o   Plant ( considered as a group of different work centers)

Formula

1)      Available time    =    No. of machine  x  Hour  x  Days 
      2)      Utilization           =          Hour actually worked   x   100%
                                                      Available hours 
3)      Efficiency            =          Actual rate of production   x   100
                                               Standards rate of production
@
            Efficiency             =          Standard hours of work produced   x   100%
                                                      Hour actually worked 

4)      Rated capacity                =     Available time x Utilization x Efficiency
5)      Demonstrated capacity   =     Total no. of days
                                                      No. of week 
6)      Total Standard time        =      Set up time      +     Run time
7)      Capacity required           =       (Actual time) x (Efficiency) x (Utilization)
8)      Actual Time                    =       Capacity required @ Total standard time
                                                         Efficiency    x    Utilization
Problems

1)      A work center consists of 4 machines each working a 16 – hour day for 5 days a week. What is the weekly available time?
Solution:
                Available time      =     No. of machines x hours x days
                                              =     4 x 16 x 5
                                              =     320 hour / week

2)      The work center in problem 1 is utilized 75% of the time. What are the hours per week actually worked?
Solution:
                Hour actually worked     =     Utilization x available hours
                                                        =     0.75 x 320
                                                        =     240 hour/week

3)      If the efficiency of the work center in problem 1 is 115%, what is the rated capacity of the work center?
Solution:
                Rated capacity     =     Available time x Utilization x Efficiency
                                             =     320 x 0.75 x 1.15
                                             =     276 hour/week

4)      A work center consists of 7 machines is operated 16 hours a day for a 5 day week. Utilization is 80%, Efficiency 110%. What is the rated weekly capacity in standard hours?
Solution:
                Available time     =     No. of machine x hour x day
                                             =    7 x 16 x 5
                                             =    560

                Rated capacity     =    Available time x Utilization x Efficiency
                                             =    560 x 0.8 x 1.1
                                             =    492.8 standard hour / week

5)      Over a period of 4 weeks, a work center produced 50, 45, 40, and 55 standards hour of work. What is the demonstrated capacity of the work center?
Solution:
                Demonstrated capacity     =     Total no of day
                                                                    No. of week 
                                                          =     50 + 45 + 40 + 55
                                                                              4
                                                          =     190
                                                                   4
                                                          =      47.5 Standard hour of work




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