Capacity Planning & Resource Management Flashcards
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Read the first 7 Capacity Planning & Resource Management flashcards as text
What does OEE (Overall Equipment Effectiveness) measure in manufacturing capacity management?
Answer: How effectively equipment is utilized by combining availability, performance, and quality rates
OEE = Availability × Performance × Quality rate, providing a comprehensive metric of how effectively manufacturing equipment is being utilized.
Which of the following best describes a 'capacity cushion' in operations management?
Answer: Reserve capacity maintained above average expected demand to handle variability
A capacity cushion is deliberately maintained reserve capacity above average demand to absorb demand variability, equipment downtime, and quality issues.
When performing a 'make or buy' capacity analysis, which factor is MOST critical to the decision?
Answer: Comprehensive total cost comparison of all relevant costs for internal production versus outsourcing
Make-or-buy decisions require full cost analysis comparing all internal production costs against total external sourcing costs to identify the most economical option.
Which capacity planning approach is most appropriate in a highly uncertain, rapidly changing market environment?
Answer: Flexible, incremental capacity additions combined with demand management strategies
Flexible, incremental capacity additions combined with demand management strategies best handle market uncertainty by reducing commitment risk while maintaining responsiveness.
What is 'Rough-Cut Capacity Planning' (RCCP)?
Answer: A high-level feasibility check of the master production schedule against key resource capacities
RCCP provides a preliminary validation of the master production schedule against key resource capacities before committing to detailed capacity requirements planning.
A manufacturing plant is consistently operating at 110% of design capacity. What is the most appropriate management response?
Answer: Investigate root causes and implement corrective actions such as overtime, outsourcing, or capacity expansion
Sustained operation above design capacity is unsustainable; systematic analysis should identify root causes and implement both short-term relief and long-term corrective actions.
In capacity planning, what is 'demand management'?
Answer: Using pricing, promotions, and lead-time policies to influence when and how much customers demand
Demand management uses pricing incentives, promotions, and delivery policies to shift demand to periods of excess capacity or moderate demand during constrained peak periods.