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CapacityManagement
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M&DCPurchasing&SupplyChain:MaterialManagement

Capacity Management

IntroductiontoMaterialManagement

MasterScheduling

Contents

MaterialRequirementsPlanning
CapacityManagement

1.

Introduction

ProductionActivityControl

2.

DefinitionOfCapacity

Purchasing

3.

CapacityPlanning

4.

CapacityRequirementsPlanning(Cap)

5.

CapacityAvailable

6.

CapacityRequired(Load)

7.

SchedulingOrders

Forecasting
InventoryFundamentals
OrderQuantities

IndependentDemandOrderingSystems8.

MakingThePlan

PhysicalInventoryandWarehouseManagement
PhysicalDistribution

1.Introduction
Sofarwehavebeenconcernedwithplanningpriority,thatis,determiningwhatistobeproducedand
when.Thesystemishierarchical,movingfromlongplanninghorizonsandfewdetails(productionplan)
throughmediumtimespans(masterproductionschedule)toahighlevelofdetailandshorttimespans
(materialrequirementsplan).Ateachlevel,manufacturingdevelopspriorityplanstosatisfydemand.
However,withouttheresourcestoachievethepriorityplan,theplanwillbeunworkable.Capacity
managementisconcernedwithsupplyingthenecessaryresources.Thischapterlooksmorecloselyat
thequestionofcapacity:whatitis,howmuchisavailable,howmuchisrequired,andhowtobalance
priorityandcapacity.

2.DefinitionOfCapacity
Capacityistheamountofworkthatcanbedoneinaspecifiedtimeperiod.Inthenintheditionofthe
APICSDictionary,capacityisdefinedasthecapabilityofaworker,machine,workcenter,plan,or
organizationtoproduceoutputperperiodoftime.Capacityisarateofdoingwork,notthequantityof
workdone.
Twokindsofcapacityareimportant:capacityavailableandcapacityrequired.Capacityavailableis
thecapacityofasystemorresourcetoproduceaquantityofoutputinagiventimeperiod.

a.Capacityrequired
isthecapacityofasystemorresourceneededtoproduceadesiredoutputinagiven
timeperiod.Atermcloselyrelatedtocapacityrequiredisload.Thisistheamountof
releasedandplannedworkassignedtoafacilityforaparticulartimeperiod.Itisthe
sumofalltherequiredcapacities.
Thesethreetermscapacityrequired,load,andcapacityavailableareimportantin
capacitymanagementandwillbediscussedinsubsequentsectionsofthischapter.
CapacityisoftenpicturedasafunnelasshowninFigure5.1.Capacityavailableisthe
rateatwhichworkcanbewithdrawnfromthesystem.Loadistheamountofworkin
thesystem.

b.Capacitymanagement
isresponsiblefordeterminingthecapacityneededtoachievethepriorityplansaswell
asproviding,monitoring,andcontrollingthatcapacitysothepriorityplancanbemet.
TheeightheditionoftheAPICSDictionarydefinescapacitymanagementasthe
functionofestablishing,measuring,monitoring,andadjustinglimitsorlevelsof
capacityinordertoexecuteallmanufacturingschedules.Aswithallmanagement
processes,itconsistsofplanningandcontrolfunctions.

c.Capacityplanning
istheprocessofmonitoringproductionoutput,comparingitwithcapacityplans,and

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takingcorrectiveactionwhenneeded.CapacitycontrolwillbeexaminedinChapter6.

d.Capacitycontrol
istheprocessofdeterminingtheresourcesrequiredtomeetthepriorityplanandthe
methodsneededtomakethatcapacityavailable.Ittakesplaceateachlevelofthe
priorityplanningprocess.Productionplanning,masterproductionscheduling,and
materialrequirementsplanningdeterminepriorities:whatiswantedandwhen.These
priorityplanscannotbeimplemented,however,unlessthefirmhassufficientcapacity
tofulfillthedemand.Capacityplanning,thus,linksthevariousproductionpriority
schedulestomanufacturingresources.

3.CapacityPlanning
Capacityplanninginvolvescalculatingthecapacityneededtoachievethepriorityplanandfinding
waysofmakingthatcapacityavailable.Ifthecapacityrequirementcannotbemet,thepriorityplans
havetobechanged.
Priorityplansareusuallystatedinunitsofproductorsomestandardunitofoutput.Capacitycan
sometimesbestatedinthesameunits,forexample,tonsofsteeloryardsofcloth.Ifthereisno
commonunit,capacitymustbestatedasthehoursavailable.Thepriorityplanmustthenbe
translatedintohoursofworkrequiredandcomparedtothehoursavailable.Theprocessofcapacity
planningisasfollows:

a.

Determinethecapacityavailableateachworkcenterineachtimeperiod.

b.

Determinetheloadateachworkcenterineachtimeperiod.
Translatethepriorityplanintothehoursofworkrequiredateachwork
centerineachtimeperiod.
Sumupthecapacitiesrequiredforeachitemoneachworkcenterto
determinetheloadoneachworkcenterineachtimeperiod.

c.

Resolvedifferencesbetweenavailablecapacityandrequiredcapacity.Ifpossible,
availablecapacityshouldbeadjustedtomatchtheload.Otherwise,thepriorityplans
mustbechangedtomatchtheavailablecapacity.
Thisprocessoccursateachlevelinthepriorityplanningprocess,varyingonlyinthelevelofdetail
andtimespansinvolved.

a.PlanningLevels
Resourceplanning
Resourceplanninginvolveslongrangecapacityresource
requirementsandisdirectlylinkedtoproductionplanning.Typically,
itinvolvestranslatingmonthly,quarterly,orannualproductpriorities
fromtheproductionplanintosometotalmeasureofcapacity,such
asgrosslaborhours.Resourceplanninginvolveschangesin
manpower,capitalequipment,productdesign,orotherfacilitiesthat
takealongtimetoacquireandeliminate.Ifaresourceplancannot
bedevisedtomeettheproductionplan,theproductionplanhasto
bechanged.Thetwoplanssetthelimitsandlevelsforproduction.If
theyarerealistic,themasterproductionscheduleshouldwork.(See
Chapter2,p.40.)

Roughcutcapacityplanning
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takescapacityplanningtothenextlevelofdetail.Themaster
productionscheduleistheprimaryinformationsource.Thepurpose
ofroughcutcapacityplanningistocheckthefeasibilityoftheMPS,
providewarningsofanybottlenecks,ensureutilizationofwork
centers,andadvisevendorsofcapacityrequirements.(SeeChapter
3,p.54.)

Capacityrequirementsplanning
isdirectlylinkedtothematerialrequirementsplan.Sincethistypeof
planningfocusesoncomponentparts,greaterdetailisinvolvedthan
inroughcutcapacityplanning.Itisconcernedwithindividualorders
atindividualworkcentersandcalculatesworkcenterloadsandlabor
requirementsforeachtimeperiodateachworkcenter.

Figure5.2showstherelationshipbetweenthedifferentlevelsofpriorityplanningand
capacityplanning.Noticethat,althoughtheupperlevelsofpriorityplanningareinput
tolowerlevels,thevariouscapacityplansrelateonlytotheirlevelinthepriorityplan,
nottosubsequentcapacityplanninglevels.Resourceplanningrelatestoproduction
planningbutisnotaninputtoroughcutcapacityplanning.
Aftertheplansarecompleted,productionactivitycontrolandpurchasingmustbe
authorizedtoprocess,orimplement,shopordersandpurchaseorders.Capacity
muststillbeconsidered.Workcentercapacitycontrolwillbecoveredinthenext
chapter.

4.CapacityRequirementsPlanning(Cap)
Thecapacityrequirementsplan(CRP)occursatthelevelofthematerialrequirementsplan.Itisthe
processofdeterminingindetailtheamountoflaborandmachineresourcesneededtoachievethe
requiredproduction.PlannedordersfromtheMRPandopenshoporders(scheduledreceipts)are
convertedintodemandfortimeineachworkcenterineachtimeperiod.Thisprocesstakesinto
considerationtheleadtimesforoperationsandoffsetstheoperationsatworkcentersaccordingly.In
consideringopenshoporders,itaccountsforworkalreadydoneonashoporder.Capacityplanningis
themostdetailed,complete,andaccurateofthecapacityplanningtechniques.
Thisaccuracyismostimportantintheimmediatetimeperiods.Becauseofthedetail,agreatamount
ofdataandcomputationarerequired.

a.Inputs
TheinputsneededforaCRPareopenshoporders,plannedorderreleases,routings,
timestandards,leadtimes,andworkcentercapacities.Thisinformationcanbe
obtainedfromthefollowing:
Openorderfile.
Materialrequirementsplan.
Routingfile.
Workcenterfile.

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b.Openordertile.
Anopenshoporderappearsasascheduledreceiptonthematerialrequirementsplan.
Itisareleasedorderforaquantityofaparttobemanufacturedandcompletedona
specificdate.Itshowsallrelevantinformationsuchasquantities,duedates,and
operations.Theopenorderfileisarecordofalltheactiveshoporders.Itcanbe
maintainedmanuallyorasacomputerfile.

c.Plannedorderreleases.
PlannedordersaredeterminedbythecomputersMRPlogicbaseduponthegross
requirementsforaparticularpart.TheyareinputstotheCRPprocessinassessingthe
totalcapacityrequiredinfuturetimeperiods.

d.Routingtile.
Aroutingisthepaththatworkfollowsfromworkcentertoworkcenterasitis
completed.Routingisspecifiedonaroutesheetor,inacomputerbasedsystem,ina
routefile.Aroutingfileshouldexistforeverycomponentmanufacturedandcontainthe
followinginformation:
Operationstobeperformed.
Sequenceofoperations.
Workcenterstobeused.
Possiblealternateworkcenters.
Toolingneededateachoperation.
Standardtimes:setuptimesandruntimesperpiece
Figure5.3showsanexampleofaroutingfile.

e.Workcentertile.
Aworkcenteriscomposedofanumberofmachinesorworkerscapableofdoingthe
samework.Themachinerywillnormallybesimilarsotherearenodifferencesinthe
kindofworkthemachinescandoorthecapacityofeach.Severalsewingmachinesof
similarcapacitycouldbeconsideredaworkcenter.Aworkcenterfilecontains
informationonthecapacityandmove,wait,andqueuetimesassociatedwiththe
center.
PartName:GearshaftPartNumber:SG123
DrawingNumber:D123X

Operation
No.

Work
Center

S/UTime
(standard
hours)

Run
Time/piece
(standard
hours)

Operation

10

12

1.5

0.2

Turnshaft

20

14

0.5

0.25

Millslot

30

17

0.3

0.05

Drill2
holes

0.1

Grind

40

50

Stores

0.45

Inventory

Figure5.3Routingfile.
Themovetimeisthetimenormallytakentomovematerialfromoneworkstationto
another.Thewaittimeisthetimeajobisataworkcenteraftercompletionandbefore
beingmoved.Thequeuetimeisthetimeajobwaitsataworkcenterbeforebeing
handled.Leadtimeisthesumofqueue,setup,run,wait,andmovetimes.

f.Shopcalendar.
Anotherpieceofinformationneededisthenumberofworkingdaysavailable.The
Gregoriancalendar(whichistheoneweuseeveryday)hassomeseriousdrawbacks
formanufacturingplanningandcontrol.Themonthsdonothavethesamenumberof
days,holidaysarespreadunevenlythroughouttheyear,andthecalendardoesnot
workonadecimalbase.Supposetheleadtimeforanitemis35workingdaysandon
December13weareaskedifwecandeliverbyJanuary22.Thisisaboutsixweeks
away,butwiththeGregoriancalendar,somecalculationshavetobemadetodecide
ifthereisenoughtimetomakethedelivery.Holidaysoccurinthatperiod,andthe
plantwillbeshutdownforinventorythefirstweekinJanuary.Howmanyworking

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daysdowereallyhave?
Becauseoftheseproblems,itisdesirabletodevelopashopcalendar.Thiscanbe
setupindifferentways,buttheexampleshowninFigure5.4istypical.

5.CapacityAvailable
a.Priority.
Capacityavailableisthecapacityofasystemorresourcetoproduceaquantityof
outputinagiventimeperiod.Itisaffectedbythefollowing:
Productspecifications.Iftheproductspecificationschange,theworkcontent
(workrequiredtomaketheproduct)willchange,thusaffectingthenumberof
unitsthatcanbeproduced.
Productmix.Eachproducthasitsownworkcontentmeasuredinthetimeit
takestomaketheproduct.Ifthemixofproductsbeingproducedchanges,the
totalworkcontent(time)forthemixwillchange.

Figure5.4Planningcalendar.(Source:TheAmericanProductionandInventoryControl
Societ)Inc.,MaterialRequirementsPlanningTrainingAid,521.Reprintedwithpermission.)
Plantandequipment.Thisrelatestothemethodsusedtomakethe
product.Ifthemethodischangedforexample,afastermachineis
usedtheoutputwillchange.Similarly,ifmoremachinesareaddedto
theworkcenter,thecapacitywillchange.
Workeffort.Thisrelatestothespeedorpaceatwhichtheworkisdone.
Iftheworkforcechangespace,perhapsproducingmoreinagiventime,
thecapacitywillbealtered.
Productspecificationandproductmixdependonthedesignoftheproductandthemix
ofproductsmade.Ifthesevaryconsiderably,itisdifficulttouseunitsofproductto
measurecapacity.Sowhatunitsshouldbeusedtomeasurecapacity?

b.MeasuringCapacity
Unitsofoutput
Ifthevarietyofproductsproducedataworkcenterorinaplantisnot
large,itisoftenpossibletouseaunitcommontoallproducts.Paper
millsmeasurecapacityintonsofpaper,breweriesinbarrelsofbeer,
andautomobilemanufacturersinnumbersofcars.However,ifa
varietyofproductsismade,agoodcommonunitmaynotexist.In
thiscase,theunitcommontoallproductsistime.

Standardtime.
Theworkcontentofaproductisexpressedasthetimerequiredto
maketheproductusingagivenmethodofmanufacture.Usingtime
studytechniques,thestandardtimeforajobcanbedetermined
thatis,thetimeitwouldtakeaqualifiedoperatorworkingatanormal
pacetodothejob.Itprovidesayardstickformeasuringworkcontent
andaunitforstatingcapacity.Itisalsousedinloadingand

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scheduling.

c.LevelsofCapacity
Capacityneedstobemeasuredonatleastthreelevels:
Machineorindividualworker.
Workcenter.
Plant,whichcanbeconsideredasagroupofdifferentworkcenters.

d.DeterminingCapacityAvailable
Therearetwowaysofdeterminingthecapacityavailable:measurementand
calculation.Demonstrated(measured)capacityisfiguredfromhistoricaldata.
Calculatedorratedcapacityisbasedonavailabletime,utilization,andefficiency

Ratedcapacity.
Rated,orcalculated,capacityistheproductofavailabletime,
utilization,andefficiency.

Availabletime.
Theavailabletimeisthenumberofhoursaworkcentercanbeused.
Forexample,aworkcenterworkingoneeighthourshiftforfivedays
aweekisavailable40hoursaweek.Theavailabletimedependson
thenumberofmachines,thenumberofworkers,andthehoursof
operation.

e.ExampleProblem
Aworkcenterhasthreemachinesandisoperatedforeighthoursadayfivedaysa
week.Whatistheavailabletime?

Answer
Availabletime=3x8x5=120hoursperweek

f.Utilization.
Theavailabletimeisthemaximumhourswecanexpectfromtheworkcenter.
However,itisunlikelythiswillbeattainedallthetime.Downtimecanoccurdueto
machinebreakdown,absenteeism,lackofmaterial,andallthoseproblemsthat
causeunavoidabledelays.Thepercentageoftimethattheworkcenterisactive
comparedtotheavailabletimeiscalledworkcenterutilization:

Hoursactuallyworked

Utilization=x
100%
Availablehours

g.ExampleProblem
Aworkcenterisavailable120hoursbutactuallyproducedgoodsfor100hours.What
istheutilizationoftheworkcenter?

Answer
100
Utilization=x100%=83.3%
120

h.Efficiency.
Itispossibleforaworkcentertoutilize100hoursaweekbutnotproduce100
standardhoursofwork.Theworkersmightbeworkingatafasterorslowerpacethan
thestandardworkingpace,causingtheefficiencyoftheworkcentertobemoreor
lessthan100%.

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actualrateofproduction
Efficiency=X100%
standardrateofproduction

i.ExampleProblem
Aworkcenterproduces120unitsinashift.Thestandardforthatitemis100unitsa
shift.Whatistheefficiencyoftheworkcenter?

Answer
120
Utilization=x100%=120%
100

j.Ratedcapacity.
Ratedcapacityiscalculatedbytakingintoaccounttheworkcenterutilizationand
efficiency:

Answer
Ratedcapacity=availabletimeXutilizationXefficiency

k.ExampleProblem
Aworkcenterconsistsoffourmachinesandisoperatedeighthoursperdayforfive
daysaweek.Historically,theutilizationhasbeen85%andtheefficiency110%.What
istheratedcapacity?

Answer
Availabletime=4x8x5=160hoursperweek
Ratedcapacity=160x0.85x1.10=149.6standardhours
Weexpecttoget149.6standardhoursofworkfromthatworkcenterinanaverage
week.

l.DemonstratedCapacity
Onewaytofindoutthecapacityofaworkcenteristoexaminetheprevious
productionrecordsandtousethatinformationastheavailablecapacityofthework
center.

m.ExampleProblem
Overthepreviousfourweeks,aworkcenterproduced120,130,150,and140standard
hoursofwork.Whatisthedemonstratedcapacityoftheworkcenter?

Answer

120+130+150+140
Demonstratedcapacity==
135standardhours
4
Noticethatdemonstratedcapacityisaverage,notmaximum,output.Italsodepends
ontheutilizationandefficiencyoftheworkcenter,althoughthesearenotincludedin
thecalculation.
Efficiencyandutilizationcanbeobtainedfromhistoricaldataifarecordismaintained
ofthehoursavailable,hoursactuallyworked,andthestandardhoursproducedbya
workcenter.

n.ExampleProblem
Overafourweekperiod,aworkcenterproduced540standardhoursofwork,was
availableforwork640hours,andactuallyworked480hours.Calculatetheutilization
andtheefficiencyoftheworkcenter.

Answer

hoursactuallyworked
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480
Utilization=
x100=
x100%=75%
availablehours640
.

Standardhoursofwork
produced540
Efficiency=x100
=x100%=112.5%
hoursactually
worked480

6.CapacityRequired(Load)
Capacityrequirementsaregeneratedbythepriorityplanningsystemandinvolvetranslatingpriorities,
giveninunitsofproductorsomecommonunit,intohoursofworkrequiredateachworkcenterineach
timeperiod.Thistranslationtakesplaceateachofthepriorityplanninglevelsfromproductionplanning
tomasterproductionschedulingtomaterialrequirementsplanning.Figure5.2illustratesthis
relationship.
Thelevelofdetail,theplanninghorizon,andthetechniquesusedvarywitheachplanninglevel.Inthis
text,wewillstudythematerialrequirementsplanning/capacityrequirementsplanninglevel.
Determiningthecapacityrequiredisatwostepprocess.First,determinethetimeneededforeach
orderateachworkcenterthen,sumupthecapacityrequiredforindividualorderstoobtaintheload.

a.TimeNeededforEachOrder
Thetimeneededforeachorderisthesumofthesetuptimeandtheruntime.Therun
timeisequaltotheruntimeperpiecemultipliedbythenumberofpiecesintheorder.

b.ExampleProblem
Aworkcenteristoprocess150unitsofgearshaftSG123onworkorder333.The
setuptimeis1.5hours,andtheruntimeis0.2hoursperpiece.Whatisthestandard
timeneededtoruntheorder?

Answer
Totalstandardtime=setuptime+runtime
=1.5+(150x0.2)
=31.5standardhours

c.ExampleProblem
Inthepreviousproblem,howmuchactualtimewillbeneededtoruntheorderifthe
workcenterhasanefficiencyof120%andautilizationof80%?

Answer
Capacityrequired=(actualtime)(efficiency)(utilization)

capacityrequired
Actualtime=
(efficiency)(utilization)
.

31.5
=.
(1.2)(0.8)
=32.8hours

d.Load
Theloadonaworkcenteristhesumoftherequiredtimesforalltheplannedand
actualorderstoberunontheworkcenterinaspecifiedperiod.Thestepsin
calculatingloadareasfollows:

1.

Determinethestandardhoursofoperationtimeforeachplannedand
releasedorderforeachworkcenterbytimeperiod.

2.

Addallthestandardhourstogetherforeachworkcenterineachperiod.
Theresultisthetotalrequiredcapacity(load)onthatworkcenterfor
eachtimeperiodoftheplan.

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e.ExampleProblem
Aworkcenterhasthefollowingopenordersandplannedordersforweek20.
Calculatethetotalstandardtimerequired(load)onthisworkcenterinweek20.
Order222isalreadyinprogress,andthereare100remainingtorun.
OrderSetupTimeRunTimeTotalTime
Quantity(hours)(hours/piece)(hours)
ReleasedOrders
22210000.2
3331501.50.2
PlannedOrders
44420030.25
5553002.50.15
TotalTime

Answer
ReleasedOrders

222

Totaltime=0+(100X0.2)

=20.0standardhours

333

Totaltime=1.5+(150x0.2)

31.5standardhours

PlannedOrders

444

Totaltime=3+(200x0.25)

=53.0standardhours

555

Totaltime=2.5+(300x0.15)

=47.5standardhours

TotalTime

=152.0standardhours

Inweek20,thereisaload(requirement)for152standardhours.
Theloadmustnowbecomparedtotheavailablecapacity.Onewayofdoingthisis
withaworkcenterloadreport.

f.WorkCenterLoadReport
Theworkcenterloadreportshowsfuturecapacityrequirementsbasedonreleased
andplannedordersforeachtimeperiodoftheplan.
Theloadof152hourscalculatedinthepreviousexampleisforweek20.Similarly,
loadsforotherweekscanbecalculatedandrecordedonaloadreportsuchasis
showninFigure5.5.Figure5.6showsthesamedataingraphicalform.Notethatthe
reportshowsreleasedandplannedload,totalload,ratedcapacityand(over)/under
capacity.Thetermovercapacitymeansthattheworkcenterisoverloadedandthe
termundercapacitymeanstheworkcenterisunderloaded.Thistypeofdisplaygives
informationusedtoadjustavailablecapacityortoadjusttheloadbychangingthe
priorityplan.Inthisexample,weeks1and2areoverloaded,thebalanceare
underloaded,andthecumulativeloadislessthantheavailable.Fortheplanner,
Week

20

21

22

23

24

Total

ReleasedLoad

51.5

45

30

30

25

181.5

PlannedLoad

100.5

120

100

90

100

510.5

TotalLoad

152

165

130

120

125

692

RatedCapacity

140

140

140

140

140

700

(Over)/Under
capacity

(12)

(25)

10

20

15

Figure5.5Workcenterloadreport.

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thisshowsthereisenoughtotalcapacityovertheplanninghorizon,andavailable
Capacityorprioritycanbejuggledtomeettheplan.

7.SchedulingOrders
Sofarwehaveassumedthatweknowwhenanordershouldberunononeworkcenter.Mostorders
areprocessedacrossanumberofworkcenters,anditisnecessarytocalculatewhenordersmustbe
startedandcompletedoneachworkcentersothefinalduedatecanbemet.Thisprocessiscalled
scheduling.InthenintheditionoftheAPICSDictionary,schedulingisdefinedasatimetablefor
plannedoccurrences.

a.Backscheduling.
Theusualprocessistostartwiththeduedateand,usingtheleadtimestoworkback
tofindthestartdateforeachoperation.Thisprocessiscalledbackscheduling.To
schedule,weneedtoknowforeachorder:
Thequantityandduedate.
Sequenceofoperationsandworkcentersneeded
Setupandruntimesforeachoperation.
Queue,wait,andmovetimes.
Workcentercapacityavailable(ratedordemonstrated).
Theinformationneededisobtainedfromthefollowing:
Orderfile.Quantitiesandduedates.
Routefile.Sequenceofoperations,workcentersneeded,setuptime,
andruntime.
Workcenterfile.Queue,move,andwaittimesandworkcentercapacity.
Theprocessisasfollows:

1.

Foreachworkorder,calculatethecapacityrequired(time)ateachwork
center.

2.

Startingwiththeduedate,schedulebacktogetthecompletionandstart
datesforeachoperation.

b.ExampleProblem
Supposethereisanorderfor150ofgearshaftSG123.Theduedateisday135.The
routesheet,showninFigure5.3,givesinformationabouttheoperationstobe
performedandthesetupandruntimes.Theworkcenterfile,showninFigure5.7,
givesleadtimedataforeachworkcenter.Calculatethestartandfinishdatesfor
eachoperation.Usethefollowingschedulingrules.

a.

Operationtimesareroundeduptothenearesteighthoursand
expressedasdaysonaoneshiftbasis.Thatis,ifanoperationtakes

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6.5standardhours,roundituptoeighthours,whichrepresentsone
day.

b.

Assumeanorderstartsatthebeginningofthedayandfinishesatthe
endofaday.Forexample.ifanorderstartsonday1andisfinishedon
day5,ithastakenfivedaystocomplete.Ifmovetimeisoneday,the
orderwillbeavailabletothenextworkstationatthestartofday7.
Answer

Answer
Thecalculationsfortheoperationtimeateachworkcenterareasfollows:
Setuptime+runtime=totaltime(standardhours)
Operation10:Workcenter12:1.5+0.20x150=31.5standardhours
=4days
Operation20:Workcenter14:0.50+0.25x150=38.0standardhours
=5days
Operation30:Workcenter17:0.30+0.05x150=7.8standardhours
=1day
Operation40:Workcenter03:0.45+0.10x150=15.45standardhours
=2days
Thenextstepistoschedulebackfromtheduedate(day135)togetthecompletion
andstartdatesforeachoperation.Todoso,weneedtoknownotonlytheoperation
timesjustcalculated,butalsothequeue,wait,andmovetimes.Theseareinthe
workcenterfile.SupposetheinformationshowninFigure5.7isobtainedfromthese
files.
Theprocessstartswiththelastoperation.Thegoodsaretobeinthestoresonday
135.Ittakesonedaytomovethem,sotheordermustbecompletedonoperation40
onday133.Subtractingthewait,queue,andoperationtimes(11days),theorder
mustbestartedonday123.Withamovetimeofoneday,itmustbecompletedon
operation30onday121.Usingthisprocess,thestartandcompletiondatecanbe
calculatedforalloperations.Figure5.8showstheresultingscheduleandFigure5.9
showsthesamethinggraphically.
WorkCenter

QueueTime
(days)

WaitTime
(days)

MoveTime
(days)

12

14

17

03

Figure5.7Leadtimedatafromworkcenterfile.

Operation
Number

Work
Center

Arrival
Date

Queue
(days)

Operation
(days)

Wait
(days)

Finish
Date

10
20

12

95

103

14

105

113

30

17

115

121

40

123

50

Stores

135

133

Figure5.8

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8.MakingThePlan
Sofarwehavediscussedthedataneededforacapacityrequirementsplan,wherethedatacome
from,andtheschedulingandloadingofshopordersthroughthevariousworkcenters.Thenextstepis
tocomparetheloadtoavailablecapacitytoseeifthereareimbalancesandifso,tofindpossible
solutions.
Therearetwowaysofbalancingcapacityavailableandload:altertheload,orchangethecapacity
available.Alteringtheloadmeansshiftingordersaheadorbacksotheloadisleveled.Ifordersare
processedonotherworkstations,thescheduleandloadontheotherworkstationshavetobe
changedaswell.Itmayalsomeanthatothercomponentsshouldberescheduledandthemaster
productionschedulechanged.
ConsiderthebillofmaterialshowninFigure5.10.IfcomponentBistoberescheduledtoalaterdate,
thenthepriorityforcomponentCischanged,asisthemasterproductionscheduleforA.Forthese
reasons,changingtheloadmaynotbethepreferredcourseofaction.Intheshortrun,capacitycanbe
adjusted.Somewaysthatthismaybedoneareasfollows:
Scheduleovertimeorundertime.Thiswillprovidetemporaryandquickreliefforcases
wheretheload/capacityimbalanceisnottoolarge.
Adjusttheleveloftheworkforcebyhiringorlayingoffworkers.Theabilitytodosowill
dependontheavailabilityoftheskillsrequiredandthetrainingneeded.Thehigherthe
skilllevelandthelongerthetrainingneeded,themoredifficultitbecomestochange
quicklytheleveloftheworkforce.

Shiftworkforcefromunderloadedtooverloadedworkcenters.Thisrequiresaflexible
crosstrainedworkforce.
Usealternateroutingstoshiftsomeloadtoanotherworkcenter.Oftentheotherwork
centerisnotasefficientastheoriginal.Nevertheless,theimportantthingistomeetthe
schedule,andthisisavalidwayofdoingso.
Subcontractworkwhenmorecapacityisneededorbringinpreviouslysubcontracted
worktoincreaserequiredcapacity.Itmaybemorecostlytosubcontractratherthan
maketheiteminhouse,butagainitisimportanttomaintaintheschedule.
Theresultofcapacityrequirementsplanningshouldbeadetailedworkableplanthatmeetsthepriority
objectivesandprovidesthecapacitytodoso.Ideally,itwillsatisfythematerialrequirementsplanand
allowforadequateutilizationoftheworkforce,machinery,andequipment.

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