Scribd
Upload
142 views17 pages

Capacity Requirement Planning

Capacity Requirements Planning is a technique that uses information on planned orders, routing files, and open orders to project the resource requirements and generate load profiles for work centers, in order to determine if sufficient capacity is available to meet production needs and help planners make scheduling decisions to alleviate bottlenecks before issues arise. It analyzes factors like the number of machines, workers, shifts, and efficiency levels to calculate the capacity of plants, departments, and work centers in standard hours and ensure capacity meets demand.

Uploaded by

vamsibu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
142 views17 pages

Capacity Requirement Planning

Capacity Requirements Planning is a technique that uses information on planned orders, routing files, and open orders to project the resource requirements and generate load profiles for work centers, in order to determine if sufficient capacity is available to meet production needs and help planners make scheduling decisions to alleviate bottlenecks before issues arise. It analyzes factors like the number of machines, workers, shifts, and efficiency levels to calculate the capacity of plants, departments, and work centers in standard hours and ensure capacity meets demand.

Uploaded by

vamsibu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 17

Capacity Requirement

Planning
Capacity Requirements
Planning
• Capacity Requirements Planning is a
computerized technique for projecting
resource requirements for critical work
stations.
– Inputs:
• Planned order releases
• Routing file
• Open orders file
– Outputs:
• Load Profile for each work center
Definitions

• Planned Order Releases: Information from the


Material Requirements Planning which tells when
you should start the order so it can be completed on
time.

• Routing Files: Information that details the


requirements of equipment and labor to complete
the order as needed in the required time frame.

• Open Orders Files: Information regarding the orders


that are currently started and need to be completed.
Capacity Requirements
Planning
• A tool for:
– determining capacity that is available
and required.
– Alleviating bottleneck work centers.
• Helping planners make the right
decisions on scheduling before
problems develop.
• Verifies that you have sufficient
capacity available to meet the
capacity requirements for MRP plans.
What is Capacity?
• The work that the system is capable
of doing in a period of time.
• It must be determined at different
levels:
– plant
– department
– work center.
• It is normally stated in standard
hours of work.
What is Capacity?
• Capacity = (no. of machines or workers) x
(no. shifts) x (utilization) x (efficiency)

(Russell & Taylor)

• Best operating level is the percent of


capacity utilization that minimizes average
unit cost.
– Usually 80% with a 20% cushion
Utilization and Efficiency
• Utilization is the percent of available time
spent working.

• Efficiency is how well a machine or worker


performs compared to a standard output
level.

Russell and Taylor


Utilization and Efficiency

Actual Hours Charged


Utilization =
Scheduled Available Hours

Standard Hours Earned


Efficiency =
Actual Hours Charged
Reason to use CPR
• Bottleneck Management -
– The throughput of all products processed
is controlled by bottlenecks.
– Work centers need to be scheduled at a
rate to prevent bottlenecks.
– To eliminate bottlenecks, a time buffer
inventory should be established.
Basic Strategies for Timing
Capacity
• CRP provides information to determine the
timing of capacity expansion. The basic
strategies in relation to a steady growth in
demand are:
– Capacity Lead Strategy
– Capacity Lag Strategy
– Average Capacity Strategy
Capacity Lead Strategy
• In anticipation of demand, capacity is
increased.
• This is an aggressive strategy and is used
to lure customers away from competitors.
Capacity Planning
How much to increase capacity demands
depend upon a number of factors, including:
• Anticipated demand – volume & certainty
• Strategic objectives
• Costs of expansion and operation
Capacity Lag Strategy
• Increase capacity after demand has
increased.
• This is a conservative strategy and may
result in lose of customers.
• You assume customers will return after
capacity has been met.
Average Capacity Strategy
• Average expected demand is calculated
and capacity is increased accordingly.
• This is the most moderate strategy.
Adjustments to Capacity
Increase capacity by:
• Adding extra shifts
• Scheduling overtime or weekends
• Adding equipment and/or personnel
Reduce load by:
• Reducing lot sizes
• Holding work in production control
• Subcontracting work to outside suppliers
Adjustments to Capacity
Reduce capacity by:
• Temporarily reassigning staff
• Reducing the length of shifts
• Eliminating shifts
Increase load by:
• Releasing orders early
• Increasing lot sizes
• Making items normally outsourced
What is CRP Used For?

• To determine the capability of a system or


resource to produce a quantity of output in
a particular time period. For example:
– Should the hospital hire more registered
nurses to care for the projected patient
load?
– Should the hospital build more rooms for
patients?
– What is the projected finish time for the
current projects?

You might also like