Operations Management for MBAs, 5th Edition

CHAPTER 8

Capacity, Scheduling, and Location Planning

CHAPTER IN PERSPECTIVE

Finally, we turn to executing our processes. To do so in an efficient but also effective manner involves three primary considerations: determining the amount of capacity needed, where it should be located, and how to effectively schedule its use. Having adequate capacity and effectively utilizing it are critical for dependability, speed, and maximizing revenues, while having excess capacity will impair costs—all strategic competitive factors. We begin the chapter with an overview of various measures of capacity and then discuss issues related to long-term capacity planning and location planning strategies.

In the next section, we address the unique aspects of making location decisions for pure services. Following this, we consider issues related to efficiently using the available capacity through effective schedule management. The chapter concludes with a discussion of short-term capacity planning, including process-flow analysis, the relationship between capacity and scheduling, and how humans' ability to learn affects capacity planning. A supplement to the chapter describes some methods of making short- and long-term forecasts.

INTRODUCTION

• Bo Burlingham, editor-at-large of Inc. magazine, claims that ...