Respond to… Monique Food Processing Company and Capacity System capacity is the highest degree of the yield of products or services that a given system can possibly deliver over a given period. System capacity is the capacity of the business to create an acceptable number of products and services to meet the demands of clients. Most systems will work at the fullest for prolonged periods, due to inadequacies and different factors like mechanical breakdown and lack of access to staff. The limit is projected in individuals served, meals provided, or the capability to generate sales dollars. (Vonderembse, M. A. and G.P. White, 2013). The bottleneck division decreases or restricts the stream of an item through the creation framework and starves downstream offices (Vonderembse, M. A. and G.P. White, 2013). Production rate = number of units produced/amount of time Department Capacity (Units/Hour) Production Rate Slack or Unused Capacity 1 200 175 25 2 175 175 0 3 200 125 25 4 300 300 125 5 200 100 25 *What is the system capacity, and which is the bottleneck department? The system capacity is the highest output created before the system bottlenecks, in this problem the system capacity is 175 units/hr. Department 1 can deliver 200 units per hour to department 2, which can only use 175 units, department 2 limits the capability, this is where the bottleneck occurs because the process cannot move forward due to the problem. Thus, this is where deals are lost; too much capacity means that money have been capitalized in resources that are not really needed. (Vonderembse, M.A. & White, G.P., 2013). If department 2 has only 175 units to offer to department 3, which can receive 200 units but is missing due to the bottleneck in department, slack happens and this will result in possible sales and market share lost because the process is not being maximized. (Vonderembse, M.A. & White, G.P., 2013). If departments 2 and 3 combine their inputs (375) units to be delivered to department 4, which can only receive (300) there is an excess of 75 units and an added bottleneck would occur. If department 4 has 300 units to be delivered to department 5, which can accept only 200 units bottlenecking occurs in here as well. Department 2 is the bottleneck department. *How much slack (unused capacity) is available in other departments? Department 1 has an unused capacity of 25 Department 2 has an unused capacity of 0 Department 3 has an unused capacity of 25 Department 4 has an unused capacity of 125 Department 5 has an unused capacity of 25 *How much system capacity can be gained by adding capacity to the bottleneck? Adding capacity to a bottleneck department will raise the capacity of a system, thus, bringing the capacity of the bottleneck department to even out with the other departments. Though, capacity decisions must be founded on the top estimation of demand. (Vonderembse, M.A. & White, G.P., 2013). Adding capacity to the bottleneck department will cause a rise in not used capacity or slack of 25 units / hours. Consequently, the total sums will become 200. *What are the key factors that determine when to add capacity? Capacity is a variable; elements that define when to add capacity are related anticipated increases in demand for a prolonged period. The increase must be under more normal situations, which can be met by the other less exclusive alternatives, such as superior scheduling, and operational procedures, adding additional period or increasing over time, better attributes of basic materials as well as raising staff motivation. (Vonderembse, M.A. & White, G.P., 2013). Once the estimated demand is known management can simply set capacity to meet the demand. *Why would an organization want to reduce its capacity? Companies may decrease capacity due to a diminution in the demand or relocating it to another place with better effectiveness and innovative technology. In addition, capacity may also be decreased due to competition from…
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