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Capacity Planning

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.

Rough-cut capacity planning

A problem commonly encountered in operating MRP systems is the existence of an overstated MPS. An overstated master production schedule is one that orders more production to be released than production can complete.

An overstated MPS causes raw materials and WIP inventories to increase because more materials are purchased and released to the shop than are completed and shipped.

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