Volume and Expansion Flexibility

Volume Flexibility

This is the ability of the system to differ the production volumes of different products to accommodate changes in demand whereas remaining profitable.  It might also be termed as capacity flexibility. Factors affecting the volume flexibility are following:

• Level of manual labour performing production
• Amount invested in capital equipment

Expansion Flexibility

This is defined as the ease with which the system might be expanded to foster total production volume. Expansion flexibility based on following factors:

• Cost incurred in adding new workstations & trained workers
• Easiness in expansion of layout
• Type of part handling system utilized

As flexibility is inversely proportional to the sensitivity to change, a measure of flexibility must quantify the term "penalty of change (POC)", that is distinct as follows:

POC = Penalty × Probability

Where, penalty is equal to the amount up to that the system is penalized for changes made against the system constraints, having the given probability.

Lower the value of POC attained, higher shall be the flexibility of the system.