This text provides informative, short introductions to the core concepts of Operations Management. This text contains more than 50 concept entries and is fully cross-referenced.An outstanding reference for Operations Management students at all levels.
Capacity is the maximum level of activity of an operations system.
Capacity planning is the set of management decisions that establishes the overall level of productive resources for a firm. In other words, it is the set of decisions dealing with how many units a facility should be capable of processing. Capacity decisions are difficult for one key reason: a capacity decision is the implementation of a long-term plan to meet an expected demand for a product or a service which, at the time of preparing the plan, may still only exist at the product concept stage or may not exist at all. Needless to say, this expected demand is subject to a great deal of uncertainty!
Let's assume, for example, that an automotive manufacturer predicts ...