UPES – The Nation Builders University

Capacity Management

Centre for
Continuing Education
UPES – The Nation Builders University

CAPACITY

•Limiting capability of a productive unit to produce within a stated time

period, normally expressed in terms of output per unit of time

•Maximum rate of output for a facility

Centre for
Continuing Education
UPES – The Nation Builders University

MEASURES OF CAPACITY

•Input measures
•Output measures

Centre for
Continuing Education
UPES – The Nation Builders University

DESIGN CAPACITY

The maximum output that a process or facility can achieve under ideal
conditions

EFFECTIVE CAPACITY

The maximum output that a process or facility can economically

sustain under normal conditions

Centre for
Continuing Education
UPES – The Nation Builders University

CAPACITY UTILISATION

The degree to which the resources are being used

CU % = average output rate * 100

maximum capacity

Centre for
Continuing Education
UPES – The Nation Builders University

BOTTLENECK OPERATION

A bottleneck is an operation that has the lowest

capacity of any operation in a facility and thus
limits the system’s output

operation I operation II operation III

200 per hour 50 per hour 150 per hour

Operation II is the bottleneck operation

Centre for
Continuing Education
UPES – The Nation Builders University

15 seconds 20 seconds 40 seconds

Bread Fill Toaster

Order Wrap
30 seconds 37.5 seconds

Bread Fill Toaster

15 seconds 20 seconds 40 seconds

Designed to process 100 sandwiches in one hour

Actual production is 90 sandwiches in one hour

Capacity utilization ?

System efficiency?
Centre for
Continuing Education
UPES – The Nation Builders University

Sawing Sanding 78 Minutes

15 Minutes 15 Minutes Assembly
78 Minutes
Welding
25 Minutes Assembly

78 Minutes
Drilling Assembly
27 Minutes

System Capacity?

Production in 8 hours at 90% efficiency?

Centre for
Continuing Education
UPES – The Nation Builders University

Bottleneck management

• Release work orders to the system at the pace set

by bottleneck capacity
• Lost time at bottleneck represents lost capacity
for whole system
• Increasing the capacity of non bottleneck station
is a mirage
• Increasing the capacity of bottleneck increases
capacity for whole system

Centre for
Continuing Education