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You are hereBasics of Supply Chain Management / Demands into Supply

Demands into Supply

Capacity Requirements Planning

The CRP occurs at the level of the MRP. Planned orders from the MRP and open shop orders (schedule receipts) are converted into demand for time in each work center in each time period. This process takes into consideration the lead times for operations and offsets the operations at work centers accordingly. In considering open shop orders, its accounts for work already done on a shop order. Capacity planning is
the most detailed, complete and accurate of the capacity planning techniques. Because of the detail, a great amount of data and computation are required.

Capacity Planning

Capacity planning involves calculating the capacity needed to achieve the priority plan and finding ways of making that capacity available. If the capacity required cannot be met, the priority plans have to be changed.

Priority plans are usually stated in units of product or some standard unit of output. Capacity can sometimes be stated in the same units. If there is no common unit, capacity must be stated as the hours available. The process of capacity planning is as follows:

5B. Capacity Management

At each level, manufacturing develops priority plans to satisfy demand. However, without the resources to achieve the priority plan, the plan will be unworkable. Capacity management is concerned with supplying the necessary resources.

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