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15 Cards in this Set
- Front
- Back
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Capacity planning |
The process of establishing the output rate that can be achieved by a facility. |
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Design capacity |
Maximum output rate under ideal conditions, can only be sustained for short period of time. |
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Effective capacity |
Maximum output rate under normal (realistic) conditions, usually lower than design capacity |
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Capacity utilization |
Percentage measure of how well available capacity is being used. Ex. Facilities, space, labor and equipment. Utilization = actual output rate / capacity (100%) Measures effectiveness, use either effective or design capacity in denominator |
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Economies of scale |
A condition in which the average cost of a unit produced is reduced as the amount of output is increased. Company operating below its best operating level and increases its output |
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Focused factories |
Facilities that are small, specialized, and focused on a narrow set of objectives. More flexible than large facilities |
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Decision tree |
Modeling tool used to evaluate independent decisions that must be made in sequence. Drawing from left to right. Uses squares to indicate decision points. Circles to indicate chance events. |
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Chance Events |
The events that could affect the value of a decision. |
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Expected value (EV) |
A weighted average of chance events, where each chance event is given a probability of occurrence. |
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Location analysis |
Techniques for determining location decisions. |
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Capacity Planning Decisions |
Identify capacity requirements, develop capacity alternatives, evaluate capacity alternatives |
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Globalization |
The process of locating facilities around the world. |
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Factor rating |
A procedure that can be used to evaluate multiple alternative locations based on a number of selected factors. ***Six step process. |
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Load-distance model |
A procedure for evaluating location alternatives based on distance. |
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Rectilinear distance |
The shortest distance between two points measured by using only north–south and east–west movements |
