Category Archives: Operations Management

Demand forecasting in manufacturing

Capacity utilization determines the effectiveness of the production network as a whole as well as its profitability. Whether over the short or long term, demand forecasts are one of the main inputs to capacity management. We, however, do not know precisely how many orders we will receive or how many customers will walk through the […]

Appropriate level of capacity in manufacturing

Before deciding on an appropriate level of capacity, one must be clear about how capacity is to be measured. Unfortunately this is not always straightforward. The ‘capacity’ of a system is normally taken to mean the system’s capability to operate at a particular level. This is usually measured as output per unit of time. For […]

Capacity Utilization in Contract Manufacturing

Being able to maximize the utilization of production facilities is important for all manufacturers. Also, providing the capability to satisfy current and future demand is a fundamental responsibility of operations management in contract manufacturing. It is at the heart of trade-offs between customer service and cost. Insufficient capacity leaves customers not served and excess capacity […]