OPERATNS AND PRODUCTION MGT
OPERATNS AND PRODUCTION MGT MGT 329
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This 2 page Class Notes was uploaded by Mrs. Cielo Murazik on Monday October 12, 2015. The Class Notes belongs to MGT 329 at Idaho State University taught by J. Street in Fall. Since its upload, it has received 25 views. For similar materials see /class/222191/mgt-329-idaho-state-university in Business, management at Idaho State University.
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Date Created: 10/12/15
CHAPTER 11 STRATEGIC CAPACITY MANAGEMENT Review and Discussion Questions l Equot 5 gt1 U Int List some practical limits to economies of scale that is when should a plant stop growing The obvious answer is that a plant should stop growing when its longrun average cost curve hits the in ection point However since this determination is often dif cult to make in the short run other factors such as coordination problems excess capacity capacity imbalance and market shifts indicate a need to consider setting capacity limits nr klm Fa AIM Hm F11 quotin p u m u u A u What are some major capacity considerations in a hospital How do they differ from those of a factory Some capacity considerations are size and composition of nursing staff RNs vs LPNs balance between operating room and intensive care units emergency rooms etc and of course how many beds are to be available One of the differences in capacity considerations between a hospital and a factory is that a hospital can add capacity rather quickly in the short run through simply adding more staff and more beds A factory is usually technologically limited and therefore must plan well in advance to add major chunks of capacity On the other hand though the general uncertainty which surrounds the demand for hospital services on any given day is much greater than would be faced by a factory Additionally factory management generally has the ability to backlog demand in such a way as to achieve more ef cient levels of capacity utilization than does a hospital I l t L 3914 um I h all u u l 39t Hr 39 nnr quot What are some reasons for a plant to maintain a capacity cushion How about a negative capacity cushion A plant may choose to maintain a capacity cushion for a number of reasons If the demand is highly unstable maintaining cushion capacity will ensure capacity availability at all times Also capacity cushions can be useful if high service quality levels are established Some organizations choose to use capacity cushions as a competitive weapon to create barriers to entry for competitors Negative capacity cushions may be maintained when demand is eXpected to decrease rapidly and capacity investment is high enough to discourage short run capacity acquisitions 8 At rst glance the concepts of the focused factory and capacity exibility may seem to contradict each other Do they really This is not necessarily true This will depend on the available technology of the facility and on the type of industry it competes in An FMS plant may for example use exible processes to enlarge the variety of products produced and delivered in a very short time Therefore it can choose to compete on fast delivery of customized products rather than on cost
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