There are many avenues that companies can use to increase their capacity. Some are more permanent (hard ceiling capacity increases) some are more…
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There are many avenues that companies can use to increase their capacity. Some are more permanent (hard ceiling capacity increases) some are more temporary (soft ceiling capacity increases). Suppose that you are running a company that produces a component for the automotive industry. Your current capacity is 5,000 units per week. You have calculated that you will need to increase your capacity to 7,500 units a week to meet your current demand. You are considering the following methods of increasing your capacity.
- The use of dedicated and flexible facilities: Your Company has several permanent storage facilities and has used temporary storage in the past.
- Flexible workforce: Your Company’s workforce generally works 8-5 Monday through Friday. You are considering adjusting existing workforce time structures to meet planned demand.
: With the planned demand increasing, perhaps temporarily, subcontracting the additional resources might be an option.
Product design flexibility
: Your Company is considering modifying its factory production lines to be better able to handle future demand.Which of these methods would you consider a hard ceiling increase? Explain?
- Which of these methods would you consider a soft ceiling increase? Explain?
- Which of these methods would you recommend for your company?
- Identify the advantages and disadvantages of using your chosen methodology.
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