Exam 5: Strategic Capacity Management

The capacity utilization rate is found by dividing best operating level by capacity used.

At some point, the size of a growing plant can become too large and diseconomies of scale become a capacity planning problem.

Making adjustments to eliminate the variance between planned and actual output is tied into intermediate-range capacity planning.

Service capacity planning is performed almost identically to manufacturing capacity planning. The only difference is that workers are a major capacity issue for services.

The smaller the capacity cushion, the better.

The capacity cushion is the ratio of capacity used to the best capacity level.

The time duration in which capacity planning is greater than one year is?

The basic notion of economies of scale is that as a plant gets larger and volume increases, the average cost per unit of output drops.

The ultimate in plant flexibility is a one-hour-changeover plant.