Approaches to expanding long term capacity, Operation Management

Assignment Help:

Approaches to Expanding long term Capacity

There  are two  major  approaches to  expanding  the long  term capacity  viz.

  1. All at once and
  2. Building  a capacity  incrementally

1. All at once approach: Consists of the  decision  to build  ultimate  facility  at one  time and  then  growing  into it  over time.

The  benefits of this  approach  are:

  • Little danger of having  to turn  down  business  due to  inadequate capacity,
  • Less interruption of production,
  • One large construction projects costs less than  several  smaller projects,
  • Due to  inflation construction costs will be higher in the  future.
  • Most  suitable  for nature  products with  stable  demand.

 

2. Building  capacity  incrementally approach  is one in which  capacity is built incrementally  as the demand grown,

The benefits  of this  approach are:

  • Less dangerous  if forecast needs  do not  materialize.
  • Funds that  could  be employed  for other  kinds  of investments  will not be  tied up in excess  capacity.
  • More  suitable  for new  products.

Related Discussions:- Approaches to expanding long term capacity

What is the relationship among companies and profit motives, What is the re...

What is the relationship between companies, profit motives, competition and private property?

Line balancing, What do you understand by “line balancing”? What happens if...

What do you understand by “line balancing”? What happens if balance doesn’t exist?

Explain what price would you try to negotiate, You have just received 10 un...

You have just received 10 units of a special sub assembly from an electronics manufacturer at a price of $250 per unit. A new order has also just come in for your computer's produc

Explain the industry life cycle affect business strategy, How does the indu...

How does the industry life cycle affect business strategy? Detail your answer based on each stage: introduction, growth, maturity, and decline. (Please provide example(s) were appl

Internet often depicted as a cloud on network diagrams, Why is the internet...

Why is the internet often depicted as a cloud on network diagrams?

Compute the movement cost or load, Registration at Southern University has ...

Registration at Southern University has always been a time of emotions, commotions and lines. Students must move among 4 stations to complete the process. Last semester's registrat

Process strategy at wheeled coach, Read the case study titled, "Process Str...

Read the case study titled, "Process Strategy at Wheeled Coach" on page 310 in the textbook (Operations Management Tenth Edition). On the basis of your reading and your knowledge o

Explain job requirements help, How might formally written job requirements ...

How might formally written job requirements help you manage your work unit?

Explain steps involved in organisation design, Explain steps involved in Or...

Explain steps involved in Organisation Design. The steps involved are:- (i) Formulate and understand the objectives and goals of the organisation and the nature of business

Explain why is it important to try to fill in the gaps, When interviewing, ...

When interviewing, why is it important to try to fill in the gaps in a candidate's employment history?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd