Chapter 7. Capacity Planning and Management: Homework Problems: 1,2,5,6,7,8,9
Chapter 7. Capacity Planning and Management: Homework Problems: 1,2,5,6,7,8,9
Chapter 7. Capacity Planning and Management: Homework Problems: 1,2,5,6,7,8,9
Capacity Planning
and Management
Long Range
Resource Sales and operations Demand
(requirements) Planning (SOP) management
planning (RRP)
Master production
Rough-cut Capacity
Scheduling (MPS)
Planning (RCCP)
Medium Range
Detailed material
Capacity
Planning (MRP)
Requirement
Planning (CRP)
Short Range
Finite Loading
Shop-floor Supplier
Input/output analysis systems systems
1. The Role of Capacity Planning in MPC Systems
Resource (requirements) Planning:
Capacity planning conducted at the business plan
level. It is the process of establishing, measuring,
and adjusting limits or levels of long-range capacity.
Resource planning is normally based on the sales &
operations plan but may be driven by higher level
plans beyond the time horizon for the production
plan, e.g., the business plan.
It addresses those resources that take long periods
of time to acquire. Resource planning decision
always require top management approval.
Synonym: long-range resource planning, resource
requirements planning (RRP).
1. The Role of Capacity Planning in MPC Systems
Rough-Cut Capacity Planning (RCCP):
The process of converting the master production
schedule (MPS) into requirements for key/critical
resources, often including labor, machinery,
warehouse space, suppliers’ capabilities, and in some
cases, money.
Comparisons of capacity required of items in the MPS
to available capacity is usually done for each key
resource.
Three approaches to performing RCCP are: capacity
planning using overall factors (CPOF), capacity bill
(bill of capacity), and resource profile.
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1. The Role of Capacity Planning in MPC Systems
Finite Loading:
Assigning no more work to a work center than the
work center can be expected to execute in a given
time period.
The specific term usually refers to a computer
technique (called advanced production scheduling
(APS)) that involves calculating shop priority revisions
in order to level load operation by operation.
Finite loading can be seen as a shop scheduling
process as well as a capacity planning procedure.
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1. The Role of Capacity Planning in MPC Systems
Input/Output Control:
A technique for capacity control where planned and
actual inputs and planned and actual outputs of a work
center are monitored. Planned inputs and outputs for
each work center are developed by capacity
requirements planning and approved by manufacturing
management.
Actual input is compared to planned input to identify
when work center output might vary from the plan
because work is not available at the work center.
Actual output is also compared to planned output to
identify problems within the work center.
Syn: input/output analysis, production monitoring.
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Links to Other MPC System Module (Summary)
Capacity
Resource Rough-Cut Input/output
Requirements Finite Loading
Planning Planning Analysis
Planning
• Linked to • Linked to • Linked to • Linked to • Linked to
sales and Master material material shop floor
operations Production requirements planning and control
planning Schedule planning shop floor • Monitors
(SOP) (MPS) (MRP) control actual
• Converts • Estimates • Prepares • Considers consumption
SOP data to capacity detailed adjustment of capacity
aggregate requirements capacity plan of plans due during
resource of MPS based on to capacity execution of
units time-phased utilization detailed
material material
plans planning
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2. Capacity Planning and Control Techniques
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2.1 Capacity planning using overall factors (CPOF)
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CPOF Example (Fig. 2 and 3)
Total required
capacity =
(33*0.95)+(17*1.85) Work center capacity = Total required capacity
= 62.80 *Historical percentage (e.g., 62.8 * 60.3%=37.87)
2.2 Capacity Bills
MPS quantities
are multiplied by
bill of capacity to
determine work
center capacity
requirements by
period (33*0.05 +
17*1.30 = 23.75)
2.3 Resource Profiles
Requirements
(by work center
and period) for
one unit of end
product are
multiplied by
the MPS plan
to determine
capacity
requirements
These
requirements
are then
summed over
all periods to
finalize the
process
2.4 Capacity Requirements Planning (CRP)
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Capacity Requirements Planning Example
Detailed MRP
Scheduled/planned
quantity multiplied
Data
by processing time
for work center
This process is repeated for each work center to complete the plan
3. Scheduling Capacity and Materials Simultaneously
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Finite Capacity Scheduling
Product A
does not
consume all
available
capacity
Combination of
all products
consumes all
available
capacity in
several periods
Planned
orders are
shifted to
stay within
capacity
limitations
3. Scheduling Capacity and Materials Simultaneously
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Capacity Monitoring with Input/Output Control
Planned inputs are determined by the capacity
planning process
Planned outputs depend upon the nature of the
work center
Capacity-constrained planned output is determined by
the processing rate of the work center
Non-capacity-constrained planned outputs match
planned inputs
Differences between plan and actual must be
addressed (management by exception)
Managing Bottleneck Capacity–Theory
of Constraints
Determine bottleneck work centers
Measure of Capacity:
Direct labor cost and its role in total production cost
Hiring/firing vs. lifetime employment
Machine/equipment capacity in the new
manufacturing environment. e.g., computer
integrated manufacturing and flexible automation.
Capacity utilization and flexibility
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4. Management of Capacity Planning/Utilization
35
Choice of a Specific Planning
Technique
Capacity
Rough-cut methods requirements APS Systems
planning
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4. Management of Capacity Planning/Utilization
38
Principles
Capacity plans must be developed concurrently with
material plans if the material plans are to be
realized.
Capacity planning techniques must match the level
of detail and actual company circumstances.
Capacity planning can be simplified in JIT
environments.
Better resource and production planning processes
lead to less difficult capacity planning processes.
Better shop-floor systems reduce the need for short-
term capacity planning.
Principles
More detailed capacity planning systems demand
more data and database maintenance.
When capacity does not match the requirements, it
isn’t always capacity that should change.
Capacity must be planned, but use of capacity must
also be monitored and controlled.
Capacity planning techniques can be applied to
selected key resources.
Capacity measures should reflect reasonable levels
of output from key resources.