Capacity and Facilities Capacity and Facilities Chapter 7 Chapter 7 Copyright 2009 John Wiley & Sons, Inc. Copyright 2009 John Wiley & Sons, Inc. Beni Asllani Beni Asllani University of Tennessee at Chattanooga University of Tennessee at Chattanooga Operations Management - 6 th Edition Operations Management - 6 th Edition Roberta Russell & Bernard W. Taylor, III Roberta Russell & Bernard W. Taylor, III
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Capacity and Facilities · 2018. 1. 30. · Increase capacity Incorporate safety and security measures Promote product and service quality ... Demand Volume Equipment Continuous,
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Capacity and FacilitiesCapacity and Facilities
Chapter 7Chapter 7
Copyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.
Beni AsllaniBeni AsllaniUniversity of Tennessee at ChattanoogaUniversity of Tennessee at Chattanooga
Roberta Russell & Bernard W. Taylor, IIIRoberta Russell & Bernard W. Taylor, III
Lecture OutlineLecture Outline
� Capacity Planning
� Basic Layouts
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� Basic Layouts
� Designing Process Layouts
� Designing Service Layouts
� Designing Product Layouts
� Hybrid Layouts
Capacity
�� Maximum capability to produceMaximum capability to produce
�� Capacity planningCapacity planning
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�� establishes overall level of productive establishes overall level of productive resources for a firmresources for a firm
�� 3 basic strategies for timing of 3 basic strategies for timing of capacity expansion in relation to capacity expansion in relation to steady growth in demand (lead, lag, steady growth in demand (lead, lag, and average)and average)
Capacity Expansion Strategies
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Capacity (cont.)
� Capacity increase depends on� volume and certainty of anticipated demand
� strategic objectives
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� costs of expansion and operation
� Best operating level� % of capacity utilization that minimizes unit
costs
� Capacity cushion� % of capacity held in reserve for unexpected
occurrences
Economies of ScaleEconomies of Scale
� it costs less per unit to produce high levels of output� fixed costs can be spread over a larger number
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of units
� production or operating costs do not increase linearly with output levels
� quantity discounts are available for material purchases
� operating efficiency increases as workers gain experience
Best Operating Level for a Hotel
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Machine Objectives of Machine Objectives of Facility LayoutFacility Layout
� Minimize material-handling costs
� Utilize space efficiently
� Facilitate entry, exit, and placement of material, products, and people
Arrangement of areas within a facility to:
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� Utilize space efficiently� Utilize labor efficiently� Eliminate bottlenecks� Facilitate communication
and interaction� Reduce manufacturing cycle
time� Reduce customer service
time� Eliminate wasted or
redundant movement� Increase capacity
products, and people� Incorporate safety and security
measures� Promote product and service
quality� Encourage proper
maintenance activities� Provide a visual control of
activities� Provide flexibility to adapt to
changing conditions
BASIC LAYOUTS
� Process layouts� group similar activities together
according to process or function they perform
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perform
� Product layouts� arrange activities in line according to
sequence of operations for a particular product or service
� Fixed-position layouts� are used for projects in which product
cannot be moved
Process Layout in ServicesProcess Layout in Services
Women’s lingerie
Shoes Housewares
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Women’s dresses
Women’s sportswear
Cosmetics and jewelry
Entry and display area
Children’s department
Men’s department
Manufacturing Process LayoutManufacturing Process Layout
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A Product LayoutA Product Layout
InIn
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OutOut
� Description� Description � Sequential arrangement of activities
Process
Comparison of ProductComparison of Productand Process Layoutsand Process Layouts
� Functional grouping of activities
Product
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� Type of process
� Product
� Demand� Volume� Equipment
� Type of process
� Product
� Demand� Volume� Equipment
activities� Continuous, mass
production, mainly assembly
� Standardized, made to stock
� Stable� High� Special purpose
activities� Intermittent, job
shop, batch production, mainly fabrication
� Varied, made to order
� Fluctuating� Low� General purpose
� Workers� Inventory
� Storage space
� Workers� Inventory
� Storage space
� Limited skills� Low in-process,
high finished goods� Small
Process
Comparison of ProductComparison of Productand Process Layoutsand Process Layouts
� Varied skills� High in-process, low
finished goods� Large
Product
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�� Typical of projects in Typical of projects in which product which product produced is too fragile, produced is too fragile, bulky, or heavy to movebulky, or heavy to move
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�� Equipment, workers, Equipment, workers, materials, other materials, other resources brought to resources brought to the sitethe site
(b) Balanced for a U(b) Balanced for a U--shaped lineshaped line
Efficiency = = = 100 %Efficiency = = = 100 %2424
2424
2424
2(12)2(12)
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All rights reserved. Reproduction or translation of this work beyond that All rights reserved. Reproduction or translation of this work beyond that
permitted in section 117 of the 1976 United States Copyright Act without permitted in section 117 of the 1976 United States Copyright Act without
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