Reference no: EM13736126

Respond classmates' postings. Some ways could include alternate solutions or calculations, and/or by challenging classmates' on scenarios of when it is best to "add" or when it is best to "reduce" capacity. Include examples.

1. The output from the capacity determination process allows product design to design to optimal global capacity levels. The output quantifies the range and expected values for financial performance such as Return on Assets (ROA) and Profit & Loss (P+L), which are driven by the demand variability caused by customer behavior over the product life cycle.

The product must be something customers will buy, which affects the producer's capacity. Product groups require visibility to the performance of a product to determine capacity decisions that drive peaks, troughs, and flat demand levels.

Determining the process affects product design if several ways like how to get the most out of equipment, transmission of knowledge (old to new product), how to maximize productivity based on a specific process, and how to lower operating costs. Process selection is also linked determining to product design and capacity depending on the intended application of the product or service and what technologies are available to improve efficiencies, increase capacity, and optimize design. Additionally, does the process require complex Bill of Materials (BOM), special handling when shipping (i.e. hazardous materials), and the end users are all determinates of what process best fit what design and the impact on capacity planning.

Decisions are based on the key characteristics of the product. The product design establishes the brand, part costs and related components, R&D, capital, and quality based on the customer needs. Capacity is measured by market, customer, and operational objectives to ensure sufficient quantity and characteristics of people, facilities, and tools are in place to achieve the organizational objectives (Vonderembse & White, 2013).

Capacity is important for resource development and long-lead time items. If products are not available or there is a shortage to deliver products and services to a customer this could result in negatively impacting product sales and customer loyalty, which opens the door for competition. The process selection is related to product design and capacity determination and should be integrated in new product introduction planning.