What are some factors influencing overall capacity?
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.
What are some factors influencing overall capacity?
Capacity planning is the determination of the production capacity needed by an organization to meet the changing demands of the various products in the product portfolio. The capacity planning decisions are taken after assessing many factors such as existing capacity, forecasting future capacity needs, financial constraints, and other associated factors. There are some controllable, and less controllable that influence the overall capacity of an organization.
- The amount of labor employed in the production process.
- The number of shifts of production in each day, overtime work, sub-contracted work, shifts per week, and so on.
- The preventive maintenance activities that are scheduled in a periodical manner.
- The setup time required for different types of products.
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