Operations Management: Sustainability and Supply Chain Management, Twelfth Edition

Supplement 7 Capacity and Constraint Management

Supplement Outline

1. Capacity 308

2. Bottleneck Analysis and the Theory of Constraints 314

3. Break-Even Analysis 318

4. Reducing Risk with Incremental Changes 322

5. Applying Expected Monetary Value (EMV) to Capacity Decisions 323

6. Applying Investment Analysis to Strategy-Driven Investments 324

Learning Objectives

1. LO S7.1 Define capacity 308

2. LO S7.2 Determine design capacity, effective capacity, and utilization 310

3. LO S7.3 Perform bottleneck analysis 315

4. LO S7.4 Compute break-even 319

5. LO S7.5 Determine expected monetary value of a capacity decision 323

6. LO S7.6 Compute net present value 324