Capacity decisions often determine capital requirements and therefore a large portion of fixed cost. Capacity also determines whether demand will be satisfied or whether facilities will be idle. As student with background and full understanding of Operations Management, explain the three (3) categorized definitions of capacities in relation to design, effective and actual capacities and give three (3) capacities expansion choices to managers with regard to the proposed capacity decision.
Breakeven Analysis
Break Even Analysis is a term used in business, cost accounting and economics. It refers to a point where the total cost incurred becomes equal to the total revenue earned. Break Even Analysis determines the number of units to be sold to earn the revenue required to cover the total costs. Total cost is a sum total of fixed and variable costs.
Process analysis
The term process analysis can be defined as breakdown of production process into different phases that converts inputs into output. A series of routine activities are incorporated using organizational resources with a view to achieve operational excellence.
3. Capacity decisions often determine capital requirements and therefore a large portion
of fixed cost. Capacity also determines whether demand will be satisfied or whether
facilities will be idle. As student with background and full understanding of
Operations Management, explain the three (3) categorized definitions of capacities in
relation to design, effective and actual capacities and give three (3) capacities
expansion choices to managers with regard to the proposed capacity decision.
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