Production capacity can be defined as the maximum rate at which a productive system can convert inputs into outputs. Capacity is typically measured as output per unit of time, that is, as a throughput rate (e.g., tons per hour). Measuring capacity is simplest for a single machine making a single standard product. Most productive systems, however, consist of an assemblage of people and machines acting in concert and may make a portfolio of products. For these more complicated systems, the processing capabilities of the system will depend upon design and control decisions, thus making the measurement of inherent capacity problematic. This note provides a qualitative discussion of the constituents of capacity.
Note on Capacity Management
by: William Lovejoy
Core Disciplines: Operations Management/Supply Chain
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