Capacity Planning
                 Capacity Planning
          Establishes overall level of 
              Establishes overall level of 
              productive resources
              productive resources
          Affects lead time 
              Affects lead time 
              responsiveness, cost & 
              responsiveness, cost & 
              competitiveness
              competitiveness
          Determines when and how 
              Determines when and how 
              much to increase capacity
              much to increase capacity
                                                         BA 320 Operations Management
             Capacity Expansion
              Capacity Expansion
            Volume & certainty of anticipated 
                Volume & certainty of anticipated 
                demand
                demand
            Strategic objectives for growth
                Strategic objectives for growth
            Costs of expansion & operation
                Costs of expansion & operation
            Incremental or one-step 
                Incremental or one-step 
                expansion
                expansion
                                                         BA 320 Operations Management
     Capacity Expansion Strategies
     Capacity Expansion Strategies
                                                         BA 320 Operations Management
      Capacity Expansion Strategies
       Capacity Expansion Strategies
                   (a) Capacity lead strategy                   (b) Capacity lag strategy
                   (a) Capacity lead strategy                    (b) Capacity lag strategy
                             Capacity
                             Capacity
                                                                          Demand
                                                                          Demand
                   Units                                         Units
                   Units                                         Units
                                          Demand
                                          Demand                                       Capacity
                                                                                       Capacity
                                            Time                                         Time
                                            Time                                          Time
                   (c) Average capacity strategy                (d) Incremental vs. one-step expansion
                   (c) Average capacity strategy                 (d) Incremental vs. one-step expansion
                                                                                 One-step expansion
                                                                                 One-step expansion
                              Capacity
                              Capacity
                   Units                                         Units
                   Units                                         Units
                                                                                    Incremental
                                                                                    Incremental
                                                                                     expansion
                                        Demand                                       expansion
                                        Demand
                                                                                  Demand
                                                                                  Demand
       Figure 9.1
       Figure 9.1                           Time                                          Time
                                            Time                                          Time
                                                                          BA 320 Operations Management
               Best Operating Levels
               Best Operating Levels
                 mm
                 oo
                 oo
                 rr
                   
                 rr
                 ee
                 pp
                   
                 tt
                 ss
                 oo
                 cc
                   
                 ee
                 gg
                 aa
                 rr
                 ee
                 vv
                 AA
                                              # Rooms
        Figure 9.2                            # Rooms
        Figure 9.2
                                                            BA 320 Operations Management