Manufacturing Resource Planning Systems: An Overview by Stephen Emberly

Author:Stephen Emberly [Emberly, Stephen]
Language: eng
Format: azw3
Published: 2017-05-12T04:00:00+00:00

(Chase, Shankar, Jacobs, & Aquilano, 2011, p. 692)

Capacity Planning and Bottlenecks

A bottleneck machine is a machine that has a demand placed on it that is exceeds its capacity. (APICS The Association for Operations Management, 2010) The entire network of equipment cannot produce an amount that exceeds the capacity of the bottleneck machine or work centre. This is where capacity planning comes into play as inventory of intermediate components or even finished goods can be produced in advance to compensate for constraints placed on the system by bottlenecks. As previously mentioned, inventory is not the only option at managements’ disposal; selling price can also be used to manage demand. Raising and lowering prices may not be such a simple task depending on the market in which a firm operates or because of contractual obligations that the firm has with its customers. Management may have to decide whether or not to accept an order based on its profitability.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.