Approaches to expanding long term capacity, Operation Management

Approaches to Expanding long term Capacity

There  are two  major  approaches to  expanding  the long  term capacity  viz.

  1. All at once and
  2. Building  a capacity  incrementally

1. All at once approach: Consists of the  decision  to build  ultimate  facility  at one  time and  then  growing  into it  over time.

The  benefits of this  approach  are:

  • Little danger of having  to turn  down  business  due to  inadequate capacity,
  • Less interruption of production,
  • One large construction projects costs less than  several  smaller projects,
  • Due to  inflation construction costs will be higher in the  future.
  • Most  suitable  for nature  products with  stable  demand.

 

2. Building  capacity  incrementally approach  is one in which  capacity is built incrementally  as the demand grown,

The benefits  of this  approach are:

  • Less dangerous  if forecast needs  do not  materialize.
  • Funds that  could  be employed  for other  kinds  of investments  will not be  tied up in excess  capacity.
  • More  suitable  for new  products.
Posted Date: 1/30/2013 6:26:18 AM | Location : United States







Related Discussions:- Approaches to expanding long term capacity, Assignment Help, Ask Question on Approaches to expanding long term capacity, Get Answer, Expert's Help, Approaches to expanding long term capacity Discussions

Write discussion on Approaches to expanding long term capacity
Your posts are moderated
Related Questions
Principle of Scheduling First Principle optimum Task Size : scheduling tens to achieve its maximum efficient task sizes are small and all tasks are of the same order of magnit

Examples of how companies use lean synchronization to reduce the environmental impact of their products

I feel like there is not enough information to even start. Can someone help explain what to do? Maybe if I can start, then I can do the rest on my own.

Imagine that you are creating a marketing plan for a company that will sell motor scooters . As you consider the marketing program, what types of strategy should you consider inc

The technique that estimates long-run costs and the minimum efficient scale by determining the scale of operation at which most firms in an industry are concentrated is called the-

Customer Needs - Business Strategy A key aspect of developing business strategy is the determination of customer needs and wants in the markets to be targeted. There are many

What is risk? How does risk differ from uncertainty? How does it impact a business?

Complete additional investigation on the JIT and EOQ models. Discuss which of the two inventory models is better and why: Economic Order Quantity or Just-in-Time?

Discuss how the data resource management methods of today will need to evolve as more types of data emerge. Why the role of a data steward is considered innovative? Explain.

Does a Vendor Managed Inventory system support a "lean" approach to supply chain management? Explain