Capacity is a measure of output a facility can hold store, receive or produce in a given period. However, design capacity is the output of a system in theory over a time period under ideal conditions. System capacity is the actual output a facility is capable of producing under ideal conditions. Both are different from actual capacity, which is the real value a facility produces under the presented conditions. In production, there are two sides, one being what management has intended according to their theoretical planning given aspects like inputs, skills and the machinery at hand. The other side is the systems side, which entails the processes and mechanisms put in place to achieve a certain output. Design capacity differs from system capacity because the final output rarely tallies. The management team sets design capacity in production management with the hopes for the best while system capacity is determined by the process in place and the machinery that will determine the output in production. Output on systems is mainly determined by the manufacturer and designers of machinery and processes. However, in both cases of design capacity and system capacity, neither would tally to the actual capacity given different aspects in the production process. However, both are instrumental in planning for production in terms of making estimates in the production process in terms of output.
(a). Expected value = Demand * Production
= (20,000*0.30) + (40,000*0.50) + (50,000*0.20)
= 6,000 + 20,000 + 10,000
= 36,000 chips
(b). Capacity to meet 150% of expected demand
= 150/100*36,000
= 1.5*36,000
= 54,000 chips
The capacity of handling 2,000 entries per regular banking day
Teller only available 60% of the time
Provides 800 entries per day
800/2,000 *100
Efficiency = 40%
Reference
Evans, J. R., & Lindsay, W. M. (2015). An introduction to Six Sigma & process improvement . Stamford, CT: Cengage Learning.
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