Major Factors Affecting Process Design Decisions Essay

837 Words Nov 25th, 2015 4 Pages
3. Major factors affecting Process design decisions
3.1 Nature of product/process demand Production process must have satisfactory capacity to produce the volume of the product/service that customer want. And provision must be made for expanding or contracting capacity to keep demand patterns fulfilled. Some types of processes can be more easily expanded or contracted than others, and the choice of the type of production process will be affected by the forecasted product/service demand. Business plans set the prices of products and services. Prices affect sales volume, product design, and the required production capacity and costs therefore the choice of price and the choice of the design of production process must be carefully done.

3.2 Degree of vertical integration Vertical integration is the amount of the production and distribution chain that is brought under the ownership of a company. This determines how many production processes need to be planned and designed. Key factor of integration is cost, availability of capital, quality, technological capability, and more Strategic outsourcing (lower degree of integration) is the outsourcing of processes in order to react quicker to changes in customer needs, competitor actions, and technology.
3.3 Production flexibility Production flexibility means quickly respond to market and customer needs. Flexibility is of two types product flexibility and volume flexibility. Product flexibility -- ability of the production (or…

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