The Sage Course Companion on Operations Management is an accessible introduction to the subject that will help readers to extend their understanding of key concepts and enhance their thinking skills in line with course requirements. It provides support on how to revise for exams and prepare for and write assessed pieces. Readers are encouraged not only to think like an operations manager but also to think about the subject critically.

Capacity Management

Capacity management

In this section short- to medium-term capacity issues are considered. These are mainly concerned with ensuring sufficient capacity of the right type is available at the right time to meet demand over the planning period. Thus a definition of capacity should take into account both the volume and timing over which capacity is available.

Capacity decisions should be taken in a systematic manner using the following steps:

  • Measuring Demand

The measurement of demand is based on the marketing strategy. From this estimate of demand the company can formulate a long-range business plan that includes capital budgets for expanding facilities and major equipment investment. Over the medium term a production plan states the amount of output that will be delivered from the operations function. A master ...

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