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Discuss the determinants of an effective capacity

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1. Facilities
The size and provision for expansion are key in the design of facilities. Other facility factors include: location factors (transport cost, distance to market, labor supply, energy resources). The layout of the work area can determine how smoothly work can be performed.

2. Product and Service Factors
The more uniform the output, the more opportunities there are for standardization of methods
and materials. This leads to greater gaps.

3. Process factors
Quantity capability is an important determinant of capability, but so in output quality. If the quality does not meet standards, then output rate decreases because of need of inspection and network activities. Process improvements that increase quality and productivity can result in increased capacity.

4. Human factor
The tasks that are needed in certain jobs, the array of activities involved and the training skills and experiences required to perform a job all affect the potential and actual output. Employee motivation, absenteeism and labor turn over all affect the output rate as well.

5. Policy Factors
Management policies can affect capacity by allowing or not allowing capacity options such
overtime or second or third shift.

6. Operational factors
Scheduling problems may occur when an organization has difference in equipment capabilities
among different pieces of equipments among other areas of impact on effective capacity include inventory stocking decisions, late deliveries’, purchasing requirements, acceptability of purchased materials and part and quality inspection and control procedures.

7. Supply chain factors
What impact will he changes have on supplier’s warehouse? If capacity will be increased will
these elements of the supply chain be able to handle the increase? If capacity is to be increased what impact the loss of business will have on this element of these supply chain.

8. External factors
Minimum quality and performance standards can restrict management options for increasing and
using capacity. In adequate planning can be a major limiting factor determining effective
capacity. The most important part of effective capacity is process and human factors. Process factors must be efficient and must operate smoothly. If not the rates of output will dramatically decrease. Human factors must be trained well and have experience, they must be motivated and have low absenteeism and labor turnovers.

NatalieR answered the question on June 13, 2022 at 08:32

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Discuss the determinants of an effective capacity

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