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Business & Finance
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How is process selection related to product design and capacity determination?

Jul 2nd, 2015

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Capacity planning & process selection

1. Definition

2. Decision tree

3. Break-even analysis

Definition

Capacity: amount of goods that a firm is capable of producing over a specified period of time

Capacity planning: to specify the level of capacity (output rate) that will meet market demands in a cost-efficient way

Factors affecting capacity
1.  External factors: government regulations, union agreements
2.  Internal factors: product design, plant layout, process flow

Process -- activities involved in making a product

Types of processes

  • Conversion
  • Fabrication
  • Assembly
  • Testing
Process flow structures
  • Job shop
  • Batch
  • Assembly line
  • Continuous flow
Decision tree

Two types of nodes

  • Alternatives/Decision: square node
  • Event/State: circular node
     
  • Two types of branches
  • Choices available: from decision node
  • Probabilities of occurrence: from event node


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Jul 2nd, 2015

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