WAYS OF ADJUSTING

CAPACITY IN SHORT RUN

ARE:
 use of overtime
Increasing the number of shifts per day
to meet a temporary strong demand.
Sub-contracting to other firms.
WAYS OF ADJUSTING CAPACITY
IN LONG RUN
Once the long range capacity needs are estimated
through long range-forecasts. There are many ways to
provide for the needed capacity.
In operation planning ,two conflicting constraints are time
& capacity. If time is fixed by the customer’s required
delivery date or processing cycle .it is possible to accept
time as the primary constraint & plan backwards to
accommodate these items.
On the other hand ,if the processing time is not
constraint in cases where products are produced to
stock & sell ,it is simpler to use a forward plan based on
finite capacity.
 OPTIMUM CAPACITY UTILIZATION
MACHINE REQUIREMENT:-In a manufacturing
concern, a substantial part of the financial resources
are invested in the plant ,machine & Equipment. The
optimum capacity utilization can be made as:
1.Making the optimum investment in plant & machines.
2.Making the optimum utilisation of installed production
capacity.
3.The issue of machine requirement generally deals with
line balance.
Following formula can assess how much
machines are required for a particular
operation so as to know how to optimally
utilize the available capacity.
N==ST*MP/MC*UC
N= No. of machines
ST=Standard time
MP= Maximum production
UC=utilization of machine capacity in %\
MC= Maximum capacity