Operations Management: Capacity Mangement – Effective Capacity

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This problem walk-though video will demonstrate how to calculate the effective capacity of a factory and determine how much extra capacity is required to meet expected demand.

CLARIFICATION: At 0:24 the 230 working days is calculated as 250 working days – 20 maintenance days = 30 days available for production.

CORRECTION: At 1:25 the calculation (and audio) incorrectly shows 22,080 × 60 min/hour × 24 min/unit. The formula should divide by 24 min/unit as follows:
22,080 machine hours × 60 min/hour ÷ 24 min/unit
  1. The Business Doctor
  2. Operations Management
  3. Capacity Management
  4. Effective Capacity
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Комментарии
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So they would just need to buy 1 machine extra for year 1 and again for year 2, correct? After that, the 9 machines meet demand for years 3-5.

adriennejohnson
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Hi I am really confused. In requirement A, how does 22080*60*24 equal 55200? I did the math and it does not equal that number. Am I missing a step?

dakotabrindle
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You mean the each machine make finish product

seifdeif
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It's 250 days per year not 230 days per yr based on the question

joeyrocko