Operation Management Exam Questions - Essay Example

In production and operations management, three types of capacity are often referred to: Potential Capacity - The capacity that can be made available to influence the planning of senior management (e.g. in helping them to make decisions about overall business growth, investment etc). This is essentially a long-term decision that does not influence day-to-day production management Capacity, being the ability to produce work in a given time, must be measured in the unit of work. Brooks (1995) writes about a "man hour", the amount of work performed by an average worker in one hour.

As Brooks (1995) notes, there is a problem with this capacity that organization, training and co-ordination activities could more than outweigh the potential benefits of having extra staff working on a task. In Capacity Management there are usually two potential constraints - time and capacity. Time may be a constraint where a customer has a particular required delivery date. In this situation, capacity managers often plan backwards, i.e. they allocate the final stage of the production tasks to the period where delivery is required; the penultimate task one period earlier and so on.

This process helps identify whether there is sufficient time to meet the production demands and whether capacity needs to be increased, even if temporarily.One of the objectives of capacity management is to deliver best practices that establish a communications framework between IT operations and the business. This is essential for ensuring that the capacity management process works toward meeting the business capacity requirements. The typical problem is that IT operations often work with measures of computer performance, megabytes of storage, or other expressions of capacity or throughput.

At the same time, the business is using expressions such as sales effectiveness, market share, time to market, profit, cash flow, and return on investment (ROI). (Microsoft 2006)PART B Discuss the capacity management strategies available to a manufacturing company who produce a range of domestic air conditioning units and experience peaks and troughs in demand in line with summer and winterer seasons. The most durable solutions to manage capacities in manufacturing of domestic air conditioning units come under the category of adjusting capacity correcting measures depending on the season.

Of course, implementation and use of these strategies may actually require changing existing management approaches, and this is not necessarily simple to do. Alternative, temporary measure can be implemented, but then consideration must be given to both the near and longer term incentives and impacts that these measures create. Ultimately, the actual adoption of Capacity Management is a political decision and, as such, may not necessarily relate directly to the most technically efficient