CAPACITY PLANNING/MANAGEMENT For operations and production management, effective capacity management is very much necessary phenomenon (Kumar,

2006; Li, 2007). Capacity management objective, which is capacity of planning and control, should match operations level to demand level. The capacity planning has to carry out with several criteria like future expansion and growth plans, trends of market, forecasting of sales etc. Capacity is a rate of a facility of production capability. It is generally expressed as outputs volume per time period. Capacity planning is also referred as the maximum load which a unit of operation can able to handle. Operating unit can be a machine, a worker, a department, a store or a plant (Kumar, 2006). The plant capacity is outputs maximum rate which depends on the production of a plant. A firms or a facilitys production capacity refers to the productions maximum rate in which the firm or the facility can able to produce the goods and services. This is basically expressed as the outputs volume as per time period (e.g. quarter, month, week, day, hour etc.). Capacity means an organizations ability, which at present or in future can meet the market demand. Following factors are responsible in determining effective Capacity: Facilities - Environment, layout, location and design. Product - Product-mix and product design. Process The capabilities of quality and quantity. Human factors - Job content, motivation, job design, compensation, absenteeism and learning rates and turnover of labours. Operational factors - Quality assurance, materials management, scheduling, break-downs of equipment and maintenance policies. External factors - Pollution control, attitudes of union, product standards and safety regulations. All factors make a firm capable to have proper capacity planning. For example, Dell has the live ordering system by which employees comes to know about the number of products they need to delivery within defined period which is sufficient for the company to deliver the product within

the five days of order receiving to the end customer. Disneyland Resort Paris uses information from market research and according to season adjusts the expected demand of entertainment facilities. For, an example when the company opened the Paris Resort it estimate that nearly 500,000 people would visit the park on the opening day, though the actual footfall was only 50,000 people (Nigel, 2009).

Measurement of Capacity According to rate of output usually plants capacity has been expressed, which means per time period the production of units. But, when organizations are producing various products, then its very complex to use the volume of each products output which expresses firms capacity (Li, 2007). At this point firms capacity is expressed as per the money value which different goods together produced. For a firm capacity planning is a very important part because it decides introduction of new products and the production in marketplace, or how to increase the production volume which is very necessary in gaining advantages on the economy scale (Kumar, 2006). When the capacity is observed and there is a need of expanded or new facilities has been determined, then at that time, decisions as per the process technology and facility location are taken. Production capacity of a firm depends on several factors. To have the correct measurement of the capacity a firm may utilize different methods. As, Dell works on Just-in-time inventory concept it becomes very essential for to pass the order on time and ensure the every of the parts and subassembler from the supplier and at the same it also check the employee availability for the assembly process. Disneyland measures its capacity on the basis of the seating capacity of its entertainment facilities and the available entertainers. It Paris park was built on 2000-hectare, providing enough space for future capacity addition as per the demand.

Kumar, S. A. (2006), Production and Operations Management, 1st Edition, New Age International, New Delhi, India Li, L. (2007), Supply chain management: concepts, techniques and practices enhancing value through collaboration, World Scientific, Danvars, MA, USA, Nigel, S. (2009), Operations Strategy, 2nd Edition, Pearson Education India, New Delhi, India.