CAPACITY

REQUIREMENTS
PLANNING
OPERATIONS PLANNING PROCEDURE
1. Sales forecasting
- “an organization which plans on the basis of an inaccurate
forecast is more capable of providing potential customers with
satisfactory delivery dates than an organization which does not
forecast and, hence, cannot plan.”

2. The forecasted sales of an organization’s goods or services

are translated into the demands they create for various factors
of production.
 EXPLODE ASSEMBLY REQUIREMENTS

Assembly – a product which consist of a number of component

parts

First step – explode the sales forecast for an assembled

product into the component parts which must be and to produce
the specified number of assemblies. The information required
to do this is in the bill of materials.

Bill of materials – lists the dif ferent constituent parts of an

assembly, shows the quantity of each part requirement for one
unit of the assembly, shows the quantity of each part required
for one unit of the assembly, and stipulates whether a given
part is manufactured of purchased.
TWO TYPES OF DEFECT OUTPUT

• CAN BE REWORKED TO ELIMINATE THE

DEFICIENCY.

• THE DEFICIENCY CANNOT BE ELIMINATED,

AND ALSO THE GOOD OR SERVICE
INVOLVED MUST BE SCRAPPED.
TOTAL SCHEDULED OUTPUT = REQUIRED # OF
GOODS UNITS
% OF THE TOTAL
SCRAPPED

= 4,500
100% - 10% = 90%

= 4,500
90%

= 5,000 LABELS
= 5,000 x 0.75min. = 3,750mins.

= 3,750mins
480mins.

= 7.8 or 8 required labor and equipments per day.

ADJUSTMENTS FOR
EFFICIENCY
Basic formula:
Standard time
Actual time = -------------------------------
ef ficiency
Illustration: assume that standard time for a required planning
operation is 0.247 per cabinet. Average ef ficiency of the
operators is 115%

Hence,
0.247
Actual time = ------------------------ = 0.215 hour/cabinet
115%
If the total output of furniture produced in one week is 410
cabinets, in planning,

Required hours = 410 cabinet x 0.215 hr/ cabinet = 88.15 hrs

Additional information:
Each machine operator is scheduled to work 40 hrs per week
Planer is scheduled to be operated two shifts, or 80 hrs per week

The number of operators is computed as follows:

88.15 hrs/week
Required operators =-------------------------------- = 2.2 operators
40 hrs/operator/week
The number of planers to be used:
88.15 hrs/week
Required planers =-------------------------------- = 1 .1 planers
80 hrs/operator/week