Thursday

INTRODUCTION TO CAPACITY AND FACILITIES




vAs demand grows a lead, lag,or average capacity strategy can be applied
vCapacity can be increased incrementally or in large steps
· Best operating level :Is the percent of capacity utilization that minimizes unit cost
· Capacity cushion :Is the percent of capacity held in reserve for unexpected occurences.
· Economic of scale :When it cost less per unit to produce high levels of output.


















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