a) An amount of capacity reserved for unanticipated events such as demand surges,
materials shortages, and equipment breakdowns.
b) Safety capacity might be a little expensive but you have two choices:
1) High capacity safety and meet your demand
2) Low capacity safety and not meet your demand
c) Company killers: 1) innovative products need higher safety capacity to keep up with
demand; 2) don't have enough money to run company
Give this one a try later!
Safety Capacity
1) identify the constraint/bottleneck
2) develop a plan for overcoming the constraints/bottlenecks
,3) focus resources on accomplishing Step 2
4) reduce the effects of constraints/bottlenecks by offloading work or expanding
capability
5) once overcome, go back to Step 1 and find new constraints/bottlenecks
Give this one a try later!
Theory of Constraints
Had a nice mission statement but did not follow it.
Mission statement about integrity and honest, just because a mission statement says
certain things doesn't mean they're going to do it.
Give this one a try later!
Mission and Vision: Enron
A ratio of outputs to several, but not all, inputs.
Example:
200 units produced sell for $12 each
Materials cost $6.50 per unit
40 hours of labor were required at $10 an hour
(200u x $12/u) ÷ [(200u x $6.5/u) + (40hrs. x $10/hr.)]
P = 1.41
Is the productivity measure of 1.41 good or bad?
, We cannot tell without a reference point compared to previous measures or to
another benchmark. But, any measure above 1 is good, we are making money. Below 1
means we are losing money.
Give this one a try later!
Productivity Measure: Multifactor
"What does southwest airlines do to compete on cost?"
Fuel hedging: in 2007 when the price of gas went up, south west had already bought
enough fuel to last for a year. All the other airlines were paying a lot for fuel while
south west got it cheap.
Give this one a try later!
Competing on Low Cost: Southwest Airlines
1) Release work orders to the system at the pace of set by the bottleneck
2) Lost time at the bottleneck represents lost time for the whole system
3) Increasing the capacity of a non-bottleneck station is a mirage
4) *Increasing the capacity of a bottleneck increases the capacity of the whole system
Give this one a try later!
Bottleneck Management
materials shortages, and equipment breakdowns.
b) Safety capacity might be a little expensive but you have two choices:
1) High capacity safety and meet your demand
2) Low capacity safety and not meet your demand
c) Company killers: 1) innovative products need higher safety capacity to keep up with
demand; 2) don't have enough money to run company
Give this one a try later!
Safety Capacity
1) identify the constraint/bottleneck
2) develop a plan for overcoming the constraints/bottlenecks
,3) focus resources on accomplishing Step 2
4) reduce the effects of constraints/bottlenecks by offloading work or expanding
capability
5) once overcome, go back to Step 1 and find new constraints/bottlenecks
Give this one a try later!
Theory of Constraints
Had a nice mission statement but did not follow it.
Mission statement about integrity and honest, just because a mission statement says
certain things doesn't mean they're going to do it.
Give this one a try later!
Mission and Vision: Enron
A ratio of outputs to several, but not all, inputs.
Example:
200 units produced sell for $12 each
Materials cost $6.50 per unit
40 hours of labor were required at $10 an hour
(200u x $12/u) ÷ [(200u x $6.5/u) + (40hrs. x $10/hr.)]
P = 1.41
Is the productivity measure of 1.41 good or bad?
, We cannot tell without a reference point compared to previous measures or to
another benchmark. But, any measure above 1 is good, we are making money. Below 1
means we are losing money.
Give this one a try later!
Productivity Measure: Multifactor
"What does southwest airlines do to compete on cost?"
Fuel hedging: in 2007 when the price of gas went up, south west had already bought
enough fuel to last for a year. All the other airlines were paying a lot for fuel while
south west got it cheap.
Give this one a try later!
Competing on Low Cost: Southwest Airlines
1) Release work orders to the system at the pace of set by the bottleneck
2) Lost time at the bottleneck represents lost time for the whole system
3) Increasing the capacity of a non-bottleneck station is a mirage
4) *Increasing the capacity of a bottleneck increases the capacity of the whole system
Give this one a try later!
Bottleneck Management
