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Operations management summary H4
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Chapter 4 of operations management is mainly about capacity and how to calculate it. There are also many concepts in it.
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MNP2601 ASSIGNMENT 5 SEMESTER 1 2024
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Full summary of the Business Operations course
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Summary Operations Management chapter 1-18
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Operations Management H4Capacity = maximum rate of output of a process or system
- Long-term - Input
- Short-term - Output
Utilization = hoeveel % van de machines/proces/mensen etc. word effectief gebruikt
- Output small numbers or standardized products
- Input flexible process of low volume
Utilization = Average output rage x 100%
Maximum capacity
Economies of scale = concept that states that the average unit cost of a service or
good can be reduced by increasing its output rate
- Spreading fixed costs
- Reducing construction costs
- Cutting costs of purchased materials
- Finding process advantages
Diseconomies of scale = occurs when the average cost per unit increases as the
facility’s size increases
Capacity cushions = amount of reserve capacity a process uses to handle sudden
increases in demand or temporary losses of production capacity
- Meet het bedrag
- Average utilization falls below 100%
(Capacity cushion), C = 100% - average utilization rate (%)
of
C = (1 – Average utilization rate/ N) x 100%
Capacity strategies: (figuur 4.2)
- Expansionist strategy
o Economics of scale
o Faster rate of learning
o Increase of market share
o Pre emptive marketing
- Wait-and-see strategy
o Reduces risk of overexpansion
o Reduces risk of obsolete technology or inaccurate assumptions
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