L7 Capacity

Nile valley University
Faculty of Graduate studies

M.Eng.: Engineering system Management
Nov. 2024
Berbar group
Production Management
Lec. 7: Capacity Management

Chapter Outline
1. Capacity Definitions
2. Rough-Cut Capacity Planning
3. Capacity Requirements Planning (CRP)
4. Input/output Control (I/O)
5. Capacity Measures
6. General Approach of Capacity Management
introduction
CAPACITY DEFINITIONS 7.1
• Capacity is a statement of the rate of producing output, and
is generally measured as the output of the process per unit
time.???
• Load is the work released and planned for the process for a
given period of time. (customer order)
• Capacity planning is the process of reconciling the
difference between the capacity available and the capacity
required to manage a load . (adjusting capacity to meet the
load or adjust the load to match capacity)
Relation between capacity and load
ROUGH-CUT CAPACITY PLANNING 7.2
• Capacity Planning Using Overall Factors.
• Example: 2 products X & Y use 3 work centers 100, 200 and 300
having MPS:
Work center usage:

total standard hours for X = 1.557, WC100 20%
For Y = 5.331 WC200 45%
WC300 35%
148.845*0.35 = 52.1
• Capacity Bills Method
• This method utilizes bill of material an routing
• Routing gives information such as:
Operations
Work centers
Standard times
Tooling
Alternate work center
See illustrative example page # 167

• Resource Profiles Method

Adding the lead time element.
See example
CAPACITY REQUIREMENTS PLANNING (CRP) 7.3
• CRP inputs from MRP therefore more detailed

• Additional information required:-
The open order file.
The routing file.
The work center file. Include lead time element:
Move time
Wait time Run time + setup Time
Queue time
CAPACITY REQUIREMENTS PLANNING (CRP) 7.3
• The "downside“:
• CRP requires MRP to be run therefore cannot be don on spread
sheet
• MRP is constantly changing as material is produced, received,
or used in production. And so do CRP, making it more difficult
to manage .
• CRP is based on time standards
INPUT/OUTPUT CONTROL (I/O) 7.4
control capacity in the operation once the orders for production

requirements have already been released.
 The intent is to monitor and control the total hours of work at
any work center by attempting to control the workflow into
and out of the center.
 To identify possible sources of problems in maintaining proper
flow of activity in the operation
11
0
12
5
The actual result was an increase of 6 hours of backlog in the operation,

from 35 hours to 41 hours.
Investigate why more work entered than expected and second is why the
workers lost 8 hours of work output over the course of the 5 weeks.
CAPACITY MEASURES 1.5
• Utilization. In general, utilization shows the maximum hours
we can expect to use the work center. Many things can affect
the hours the equipment can be used, including machine
problems, absentee workers, material problems, and other types
of delays. Therefore, utilization is defined as:
Utilization = (Hours worked)/(available hours) x 100%
Or, from a product perspective:
Utilization = (Actual Output)/(Design Capacity) x 100%
Efficiency. Efficiency essentially measures the actual output of a
defined area as compared to the standard rate of production based
on the same number of hours.;
Efficiency = (standard hours produced)/(hours worked) x 100%
Or, from a product perspective:
Efficiency = (actual production rate )/( standard production rate) x 100%
Rated Capacity. Defined as the product of available time,
efficiency, and utilization.
Rated Capacity = (available time) x (efficiency) x (utilization)
Demonstrated Capacity. As implied by the name, demonstrated

capacity is the actual capacity output as shown by the production
records.
GENERAL APPROACH TO CAPACITY MANAGEMENT 7.6
• Overtime
• Subcontracting
• Hiring/firing workers
• Temporary workers
• Shift workers from one work center to another
(assumes workforce flexibility)
• Use alternative routings for the work
GENERAL APPROACH TO CAPACITY MANAGEMENT 7.6
• What about long run?

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Nile valley University

Faculty of Graduate studies

Lec. 7: Capacity Management

Work center usage:

See illustrative example page # 167

• Resource Profiles Method

• CRP inputs from MRP therefore more detailed

control capacity in the operation once the orders for production

The actual result was an increase of 6 hours of backlog in the operation,

Demonstrated Capacity. As implied by the name, demonstrated

• What about long run?

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