Capacity Requirements for Delta Synthetic Fibres - Assignment Example

Download file to see previous pages Considering the initials sales for Britlon to be carried out in the year 2009, the expanding facilities need to be initiated soon. As the forecasts have shown a slightly decreasing level of sales volume during the periods for 2006 to 2009, the full capacity of operation of the existing facilities is not required. Hence, reasonable levels of capacity estimation need to be undertaken for supporting the expected business volumes to be generated. This capacity forecasting is necessary because of the following reasons (Beasley, n.d.).
The purchase of raw materials and their procurement process is to be analyzed properly to estimate the stock required to be maintained at each of the production locations. Thus the control on the inventory, planning the production process and its schedule all depends on the capacity that is available.
This could also help the sales and logistics to plan their operations to ensure the support systems to meet the target volumes set from each plant. This could also help to give the feedback of the possibility of future expansion or necessity in the reduction of the production for the overall operational efficiency.
Capacity forecasting would also help the human resources department and the financial department to ensure the allocations of resources at a specific time to ensure smooth flow of operations. Also, this would help to review the operations and help the top management to take strategic decisions that are vital for the viable performance of the company.
Based on these factors the, overall capacity at DSF is estimated as 40 million Kg of production capacity, which includes 30 million Kg of Britlon and 10 million Kg of Britlene. The production capacity for Britlene is planned to lower from the 5 fully working plants in 2006 to 3 fully working plants in 2009. With the information for the year 2006, the number of plants required would be five. But in 2008, at the existing rate of production, only four full capacity plants are needed. Thus the initial works of modification of facilities could be initiated during this time. One of the plants could stop the production and the necessary modification works could be started. This is expected to consume two years of time and by 2009 one fully operational plant for Britlon would be in place. Thus the expected sales of Britlon would be able to meet with this capacity. Thus in 2009, three plants for Britlene and one plant for Britlon would be in operation.
Earlier to this, the erection of two new facilities for the production of Britlon would be initiated at two different places attached to the existing sites. This project could be totally separate from the current production patterns. As it involved setting up of new facility, this might not hinder the operations at the above project locations too. This could be initiated in 2006 itself and hence by 2010, it would be possible for DSF to have three fully functional plants for the production of Britlene and Britlon. Then the capacity available with DSF would be 15 million Kg of both Britlon and Britlene. Thus as per the forecast, this capacity is enough to meet the expected volume of the sales. In 2009, one more Britlene plant could be modified to the have the capacity for the production of Britlon. ...Download file to see next pagesRead More