Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134855424
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter 4, Problem 3C
Summary Introduction

Interpretation: The effect of decisions related to capacity expansion on the operating decision.

Concept Introduction: Capacity decision is not a decision to be taken in isolation. It is the installed capacity which promises to deliver the services to the customers. The utilization of this capacity by appropriate and all-round management of the organization results in operational profit/loss. It is a part of the integrated management of the organization. Market demand and availability of resources are two pre-requisites for any changes to the capacity strategy. Since, we are also talking of utilizing the capacity, functions/processes of management shall be affected by the expansion of capacity.

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1. What factors should be considered when selecting the appropriate capacity cushion? Howdoes the choice of capacity cushion relate to other decisions in operations management?To other functional areas?  2. Capacity planning requires a demand forecast for an extended period of time into thefuture. What concerns would you have regarding an extended forecast as a capacityplanner?
What do you understand by capacity planning? Explain the decision tree modeling for capacity expansion
What kind of major changes could take place in Arnold PalmerHospital’s demand forecast that would leave the hospital withan underutilized facility (namely, what are the risks connectedwith this capacity decision)?

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Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)

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