Capacity Requirements Planning
         Capacity Requirements Planning
         • Capacity Requirements Planning is a 
           Capacity Requirements Planning is a 
           computerized technique for projecting resource 
           computerized technique for projecting resource 
           requirements for critical work stations.
           requirements for critical work stations.
            – Inputs:
              Inputs:
               •Planned order releases
                 Planned order releases
               •Routing file
                 Routing file
               •Open orders file
                 Open orders file
            – Outputs:
              Outputs:
               •Load Profile for each work center
                 Load Profile for each work center
                                     
            Definitions
            Definitions
         • Planned Order Releases: Information from the 
            Planned Order Releases: Information from the 
            Material Requirements Planning which tells when you 
            Material Requirements Planning which tells when you 
            should start the order so it can be completed on time.
            should start the order so it can be completed on time.
         • Routing Files: Information that details the 
            Routing Files: Information that details the 
            requirements of equipment and labor to complete the 
            requirements of equipment and labor to complete the 
            order as needed in the required time frame.
            order as needed in the required time frame.
         • Open Orders Files: Information regarding the orders 
            Open Orders Files: Information regarding the orders 
            that are currently started and need to be completed.
            that are currently started and need to be completed.
                                       
         Capacity Requirements Planning
         Capacity Requirements Planning
        • A tool for:
           A tool for:
           – determining capacity that is available and 
             determining capacity that is available and 
             required.
             required.
           – Alleviating bottleneck work centers.
             Alleviating bottleneck work centers.
        • Helping planners make the right 
           Helping planners make the right 
           decisions on scheduling before problems 
           decisions on scheduling before problems 
           develop.
           develop.
        • Verifies that you have sufficient capacity 
           Verifies that you have sufficient capacity 
           available to meet the capacity 
           available to meet the capacity 
           requirements for MRP plans.
           requirements for MRP plans.
                                    
        What is Capacity?
        What is Capacity?
        • The work that the system is capable of 
          The work that the system is capable of 
          doing in a period of time.
          doing in a period of time.
        • It must be determined at different 
          It must be determined at different 
          levels:
          levels:
           – plant 
            plant 
           – department
            department
           – work center.
            work center.
        • It is normally stated in standard hours of 
          It is normally stated in standard hours of 
          work.
          work.
                                 
          What is Capacity?
          What is Capacity?
         • Capacity = (no. of machines or workers) x (no. 
            Capacity = (no. of machines or workers) x (no. 
            shifts) x (utilization) x (efficiency)
            shifts) x (utilization) x (efficiency)
                                           (Russell & Taylor)
                                           (Russell & Taylor)
         • Best operating level is the percent of capacity 
            Best operating level is the percent of capacity 
            utilization that minimizes average unit cost.  
            utilization that minimizes average unit cost.  
             – Usually 80% with a 20% cushion
               Usually 80% with a 20% cushion