Operations Management Unit 2 Updated
Operations Management Unit 2 Updated
Operations Management Unit 2 Updated
For firms produce a single product or multiple product , uses output rate
capacity as the measure .
In services output rate capacity is difficult , but still we use Input rate
capacity , like Hospitals use available beds per month , Airlines use s available
seat miles per month ,digital marketing services use- Number of hours of
creativity or strategy used .
Providing long range capacity means making production facilities available ,
land , building, tools , materials , personnel and others .
Planning , buying a building , starting up, training, required for a new
production facility could take 5 to 10 years , and such facility can remain
economically productive for 15 to 20 years after that it can be
technologically obsolete or product obsoleting can happen .
UNIT 2
• Economies of scale
• For a given production facility, there is an annual volume of outputs
that results in the least average unit cost . This level of output is called
the facility's Best operating level .
• Economies of scale exist when long run average total cost decreases
as output increases, diseconomies of scale occur when long run
average total cost increases as output increases, and constant returns
to scale occur when costs do not change as output increases.
UNIT 2
UNIT 2
• Capacity Alternatives:
• 1. Do nothing
• 2. Expand large now
• 3. Expand small now, with option to add later
• Strategic sourcing
Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.
Alternative Proxies: