Podcast
Questions and Answers
What was the primary challenge faced by Toyota in its capacity planning?
What was the primary challenge faced by Toyota in its capacity planning?
- Inadequate employee training
- Decreasing sales of hybrid vehicles
- Rising costs of raw materials
- Expanding capacity for electric vehicles (correct)
How did Starbucks manage short-term spikes in customer demand?
How did Starbucks manage short-term spikes in customer demand?
- Extending delivery hours for online orders
- Hiring seasonal employees and adjusting store hours (correct)
- Increasing prices during peak times
- Reducing product variety during busy periods
What is one advantage of effective capacity planning?
What is one advantage of effective capacity planning?
- Improved efficiency in resource usage (correct)
- Reduced need for market research
- Minimum reliance on supplier partnerships
- Guaranteed profit during production downturns
What is a disadvantage of capacity planning that companies should be aware of?
What is a disadvantage of capacity planning that companies should be aware of?
What strategy did Toyota employ for future production needs?
What strategy did Toyota employ for future production needs?
What is the primary goal of short-term capacity planning?
What is the primary goal of short-term capacity planning?
Why is adaptability to market changes important in capacity planning?
Why is adaptability to market changes important in capacity planning?
Which of the following represents a tool for responding to short-term capacity challenges?
Which of the following represents a tool for responding to short-term capacity challenges?
What is a defining characteristic of long-term capacity planning?
What is a defining characteristic of long-term capacity planning?
Which approach helps e-commerce companies like Amazon improve their customer service?
Which approach helps e-commerce companies like Amazon improve their customer service?
Why is effective capacity planning essential in business operations?
Why is effective capacity planning essential in business operations?
What can proper capacity planning help prevent?
What can proper capacity planning help prevent?
Which situation is NOT typically addressed by short-term capacity planning?
Which situation is NOT typically addressed by short-term capacity planning?
What must a company consider when planning for long-term capacity?
What must a company consider when planning for long-term capacity?
How do businesses typically address demand peaks with short-term capacity planning?
How do businesses typically address demand peaks with short-term capacity planning?
Which aspect of capacity is critical for avoiding excessive delays in production?
Which aspect of capacity is critical for avoiding excessive delays in production?
What is the primary purpose of demand forecasting in capacity planning?
What is the primary purpose of demand forecasting in capacity planning?
Which method is NOT commonly used in demand forecasting?
Which method is NOT commonly used in demand forecasting?
What does Capacity Requirements Planning (CRP) primarily focus on?
What does Capacity Requirements Planning (CRP) primarily focus on?
How does Amazon manage fluctuations in customer demand during peak seasons?
How does Amazon manage fluctuations in customer demand during peak seasons?
Which of the following is a part of effective capacity planning?
Which of the following is a part of effective capacity planning?
What is an example of a short-term capacity adjustment Amazon makes?
What is an example of a short-term capacity adjustment Amazon makes?
What key factor does Capacity Requirements Planning (CRP) analyze?
What key factor does Capacity Requirements Planning (CRP) analyze?
Which technique is primarily used by clothing retailers for demand forecasting?
Which technique is primarily used by clothing retailers for demand forecasting?
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Study Notes
Toyota's Long-Term Capacity Planning
- Toyota built new production plants in North America and Japan to meet growing global demand for hybrid and electric vehicles.
- Toyota invested in flexible production lines to handle various vehicle models.
Starbucks' Short-Term Capacity Management
- Starbucks hires seasonal employees and extends store hours to manage demand during peak periods.
- Starbucks implements temporary production shifts at coffee roasting plants to meet increased demand.
- Starbucks prioritizes short-term solutions to avoid unnecessary long-term investment.
Advantages of Capacity Planning
- Improved efficiency through optimal resource utilization.
- Cost control by minimizing unnecessary expenses.
- Better customer service through prompt demand fulfillment.
- Adaptability to market changes by ensuring a flexible and competitive advantage.
Disadvantages of Capacity Planning
- Long-term capacity planning might involve substantial investment and resource commitment.
Techniques for Capacity Planning
- Demand Forecasting: Predicting future demand using historical data, market trends, and statistical models.
- Methods: Time series analysis, regression analysis, and qualitative forecasting (expert opinions, market research).
- Capacity Requirements Planning (CRP): Determining the required production capacity to meet demand over a specific period.
- Goal: Aligning available capacity with production plans and preventing bottlenecks.
Amazon's Capacity Management
- Amazon uses dynamic capacity management techniques to address fluctuating demand, especially during peak seasons.
- They hire temporary workers, add shifts, expand warehouse operations to manage short-term demand.
- They make long-term investments in automation and new fulfillment centers to handle increased volumes.
Concepts of Capacity and Capacity Planning
- Capacity: The maximum output a system can achieve in a given period.
- Capacity Planning: The process of determining the necessary production capacity to meet changing demand.
- Goal: Efficient resource utilization and alignment of supply with demand.
Short-Term vs. Long-Term Capacity Planning
- Short-Term Capacity Planning: Managing capacity over a few days to several months to address fluctuations in demand.
- Long-Term Capacity Planning: Making strategic decisions over several years to meet future growth or sustained increased demand.
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