Strategic Capacity Planning - OPM400

Why is strategic capacity planning important for organizations?

Which of the following is considered a 'useful' capacity decision?

Select all the correct formulas for calculating capacity metrics.

Actual production last week was 25,000 units, effective capacity was 28,000 units, and design capacity was 230 units per hour. The factory operates 7 days a week, three 8-hour shifts. What the Design capacity for one week, Utilization factor, & Efficiency Factor?

Actual production last week was 35,000 units, effective capacity was 48,000 units, and design capacity was 430 units per hour. The factory operates 7 days a week, three 8-hour shifts. What the Design capacity for one week, Utilization factor, & Efficiency Factor?

What are the three key inputs to capacity planning for products and services?

Match each type of business with its corresponding input and output measures of capacity.

Which of the following is NOT a determinant of effective capacity according to the slide?

Employees work 7 hours per day and produce 60 units/hour. Help Caroline to determine the following: Based on her very high demand, is there a bottleneck and what stage is it? What is the capacity of the process per day?

Which of the following is an economic factor used in evaluating capacity alternatives?

Which of the following statements about break-even analysis is correct?

Which formula is used to calculate the break-even volume in break-even analysis?

The management of a pizza place would like to add a new line of small pizza, which will require leasing a new equipment for a monthly payment of $4,000. Variable costs would be $4 per pizza, and pizzas would retail for $9 each.

1.How many pizzas must be sold per month in order to break even?

2.What would the profit (loss) be if 1200 pizzas are made and sold in a month?

3.How many pizzas must be sold to realize a profit of $10,000 per month?

4.If demand is expected to be 700 pizzas per month, how much is profit/loss?

The management of a pizza place would like to add a new line of small pizza, which will require leasing a new equipment for a monthly payment of $6,000. Variable costs would be $7 per pizza, and pizzas would retail for $10 each.

1.How many pizzas must be sold per month in order to break even?

2.What would the profit (loss) be if 1,300 pizzas are made and sold in a month?

3.How many pizzas must be sold to realize a profit of $11,000 per month?

4.If demand is expected to be 800 pizzas per month, how much is profit/loss?

The ABX Company has developed a new product and is wondering if they should make this product in-house or have a capable supplier make the product for them.

Option 1: The Fixed Cost (annual) is $160,000 for Make in-house with Variable Cost is $100.

Option 2: Buy$150.

If the annual demand for the new product is estimated at 1000 units, should the company make or buy the product? Justify your answer using the cost data provided.

The ABX Company has developed a new product and is wondering if they should make this product in-house or have a capable supplier make the product for them.

Option 1: The Fixed Cost (annual) is $260,000 for Make in-house with Variable Cost is $50.

Option 2: Buy $150.

1.If the annual demand for the new product is estimated at 5000 units, should the company make or buy the product?

2.From which quantity should they consider the option make or buy?

Why is it suggested to write down and simplify the total cost of each option before making a decision between suppliers?

If the annual demand for the new product is estimated at 1000 units, which supplier should the company use? What is the cost for each supplier?

For what range of demand volume will Supplier B be better than Supplier A?

Given the fixed and variable costs for Supplier A and Supplier B, what is the break-even quantity at which the company will be indifferent between the two options?