Chapter 5

CAPACITY MANAGEMENT

5.1 INTRODUCTION

Capacity is a value creating ability of an organization, an ability that takes form in a wide variety
of resources. Lying at the heart of the management process, capacity shapes and defines future
planning and control.

The essence of the capacity issue is the unavoidable fact that resources not used to their fullest
represent waste. Wastes erode profits and shorten the life of an organization. Waste is the entropy
of the business systems, the drag on their current and future performance. Effective managing an
organization starts with making the fullest use of every company’s command that is its theoretical
capacity. Using this capacity productivity, maximizing its value creating potiential, starts with
eliminating resources waste, which is the idle or excess capacity.

5.2 CAPACITY

Capacity is the measure of productive capability of a facility for a unit of time.

Capacity defined by APICS as “the capability of a worker, machine, work center, plant or
organization to produce output per period of time”.
Capacity is the rate of doing work, not the quantity of work done.

Usually two kinds of capacity are important: capacity available and capacity required.
Capacity available is the capacity of a system or resources to produce a quantity of output in a
given time period.

It is affected by the following:

Product specification and Product mix.

The work content (work required to make the product) changes if there is a change in product
specification as well as product mix.

Plant and Equipment.

The number and composition of equipment determine the work content and the output.

Work Effort.
If the work effort varies that is the pace of doing work, then the capacity is also altered.

5.3 MEASURING CAPACITY

Depending on the product variation two commonly methods are employed to measure capacity. If
there is no variation or less variation in the product then standard units of output is used to
measure capacity. For example number of cars manufactured in an automobile industry. If there is
a considerable amount of variation present in the product then the work content of the product is
expressed in terms of standard time taken for its completion using a given method of
manufacture. Usually time study technique is used to determine the standard time for the job
required.

5.4 DETERMINATION OF AVAILABLE CAPACITY

There are two ways of determining the available capacity: measurement and calculation.
Measured capacity can be obtained from historical data whereas calculated data can be
determined from available time, utilization and efficiency.

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 Available capacity

Measured Capacity Calculated/Rated Capacity

Figure 5.1 The types of available capacity.

Rated capacity is calculated by taking into account the available time, work center utilization and
efficiency.

Rated capacity = Available time *Utilization* Efficiency

Standard Hours at a particular work Center = Setup time in Hours +(Number of Hours of Run
Time per piece * Number of Pieces)

Actual Hours Required=Standard Hours Required * (Efficiency * Utilization)

Example 5.1
How many standard hours are needed to run an order of 300 pieces if the setup time is 1.5 hours
and the run time 0.4 hours per piece? How many actual hours are needed at the work center if the
efficiency is 130% and the utilization is 70 %? Also calculate the rated capacity (assume 40
machine-hours per week).

a) Standard Hours = Setup Time + Run time for 300 pieces

= 1.5 Hrs + 300 * 0.4 Hrs
= 121.5 Hrs.
b) Efficiency = standard rate of production/actual rate of production *100 %
Therefore actual rate of production = 121.5/1.3
= 93.30 Hrs
Utilization = hours actually worked / Available hours * 100 %
Therefore actual Hours needed = 93.30 * 0 .7
= 65.31 hrs.
c) Rated capacity = available hours *efficiency * utilization
= 40 * 0.7 * 1.3
= 36.4 Standard Hours.
5.5 LOAD

Capacity required (Load) is the capacity of a system or resources needed to produce a desired
output in a given time period.

The APICS Dictionary defines load as the amount of planned work scheduled for and actual work
released to a manufacturing facility, work center, or operation for a specific span of time, usually
expressed in terms of standard hours of work or in units of production when the items consume
similar resources at the same rate. Simply stated load is the input rate, the rate at which work is
imposed upon the system.

Loads are of following types.

1.Planned Load
2.Unplanned Load

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 Released Load

Planned Load
Loads Unreleased Load

Unplanned Load

Figure 5.2 Types of Load

5.5.1 Planned Load

It is generated by the MRP I system. This type of load is known in advance and the capacity for
meeting this planned load can be arranged long before it is required. The types of planned orders
are as following.

Released Load (Scheduled Receipts). The released load consists of those orders that have been
released to the shop by the MRP Planner. This order appears as MRP and displays as scheduled
receipts, and on the shop dispatch lists as shop orders.

Unreleased Load (Planned order release). The unreleased orders, or planned order releases, are
the orders in the MRP system for planning purposes only; they do not show up in the shop at all
until actually released by the planner.

5.5.2 Unplanned Load. It includes the total load that was not generated by the MRP. This can
include emergencies, engineering requests, unplanned response to very important customers,
personal works, and various other situations. The unplanned load is obviously a cause of concern
and should be minimized.

5.6 CAPACITY EXPANSION STRATEGY

There are three basic strategies for timing of capacity expansion in relation to a steady growth in
demand.

Capacity Lead Strategy Capacity Lag Strategy

Units Units

Demand
Capacity

Demand
Capacity

Time
Time

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 Incremental Vs One step
expansion
Units Average Capacity Strategy Units

Demand One step expansion

Capacity
Incremental expansion

Time Time

Figure 5.3 Capacity Expansions Strategy

5.6.1. Capacity Lead Strategy

The expansion of capacity takes place in anticipation of demand. It is an aggressive policy used to
gain a foothold in an emerging market.

5.6.2. Capacity Lag Strategy.

The capacity is expanded only after a demand has been identified. This is a conservative strategy
that brings high ROI (Return on Investment) but there is a chance of lost sales in the process.

5.6.3. Average Capacity Strategy.

The expansion of the capacity takes place with the average expected demand. This is a moderate
strategy in which lies midway between the above two strategies.

5.6.4.Incremental or One step Strategy.

Capacity expansion can also take place incrementally or in one large step. This strategy is less
risky but is more expensive.

5.7 CAPACITY MANAGEMENT

It is defined by the APICS dictionary as the “the function of establishing, measuring, monitoring,
and adjusting limits or levels of capacity in order to execute all manufacturing schedules”.
Capacity management is needed to make sure that priority plans are met and which proper
monitoring, planning and controlling achieve. It consists of planning and control functions.( Refer
Figure 5.7)

5.7.1 CAPACITY CONTROL

It is the process of monitoring the production output, comparing it with capacity plans and taking
corrective actions wherever necessary.

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 5.7.2 CAPACITY PLANNING
Capacity planning is the process of determining the resources required to meet the priority plan
and the methods needed to make that capacity available. Adjustments are made in the priority
plans if capacity requirements cannot be met.

The process of capacity planning entails three basic steps.

1. Determination of capacity available at each work center in each time period to meet the
proposed production plan.
2. Comparison of the required capacity (Load) to the planned capacity.
3. If necessary, adjustment of planned and required capacity so that the two are in balance.
This process occurs at each level in the priority planning process, varying only at the level of
detail and the time span involved.

5.7.2.1 CAPACITY PLANNING LEVELS

Capacity planning levels are based on the relevant time horizon.

Priority Capacity

Production Resource Planning

Plan
(Product Lines or Families)
Long Range
Plan
Master Production
Schedule Rough cut capacity planning

Medium Range

Master Requirement Capacity Requirement

Plan Planning

Short Range

Implementation/Control
Production Activity Capacity Control
Control

Short Range

Figure 5.4 Capacity Planning Levels

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5.8 RESOURCE REQUIREMENT PLANNING

It is long-range capacity planning process, which is directly linked to the production planning.
Resource planning is a top-level management activity that determines long range, overall levels
of capacity. It involves changes in manpower, plant and capital equipment, product design, or
facilities that take a long time to acquire and eliminate.

Steps followed in resource requirement planning.

1. Identification of critical resources.

2. * Collection of production plan data
* Identification of product structures.
* Determination of bill of resources.
* Calculation of total resource requirement
3. Evaluation of per-period resource requirement with the available resources and
identification of shortfalls.
4. After identification of shortfalls the necessary resource are provided.

5.9 ROUGH-CUT CAPACITY PLANNING (RCCP)

It’s the next level of capacity planning. Rough cut capacity planning as defined by APICS as the
process of converting the master production schedule into requirements for key resources, often
including labour, machinery, warehouse space, supplier’s capabilities, and in some case money.
RCCP determines the impact of high level plans on resources, which are needed to carry out
production plans. RCCP quickly identifies the obstacles to the plan without going through the
details.

RCCP performs two basics functions

1. Its testifies the validation of a production plan and the MPS before doing any detailed
material or capacity planning
2. Initiates actions for making mid-range to long-range capacity arrangements.
However in case of a product mix the RCCP runs directly from the MPS.

5.9.1 BENEFITS OF RCCP

Simpler and Quicker Tool

RCCP uses a simpler and quicker approach to master schedulers. Unlike other planning tools it
does not require a greater accuracy in detail routing for each items, bill of materials, and
inventory models.

Better Simulation Tool

RCCP requires minimal computational time in comparisons to other tools.

5.9.2 PITFALLS OF RCCP

Cannot be used as a short term planning tool.

RCCP does not calculate capacity requirements by work centers. It does not take into account the
Work in process, completed parts and assemblies. This negates it as short term planning and
limits it to an intermediate and long range-planning tool.

Lacks Detail
RCCP considers only key or critical resources. Actual product building requires the resources in
all work centers. Therefore the execution of production plan is susceptible to contingencies not
highlighted during the RCCP process.

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 5.10 CAPACITY REQUIREMENT PLANNING (CRP)
The CRP is directly connected with the material requirement planning MRP. This type of
planning focuses on components parts and sub assemblies; therefore a greater detail is involved.
It is concerned with individual orders at individual work centers and calculates work center loads
and labour requirements for each time period at each work center.
The CRP is most detailed, complete and accurate of the capacity planning techniques.
5.10.1 INPUTS TO CRP
Capacity requirement planning is based on released and planned orders generated by the MRP
system. The inputs to the CRP are open released orders, planned released orders, routings, time
standards, lead times, and work centers capacities.
Open Order File (Scheduled Receipts)
An open shop order appears as scheduled receipts on the material requirements plan. It is
triggered for the release of quantity of a part to be manufactured and completed on a specific date
that contains information about the quantities, due dates and operations.
The open order file is record of all the active shop orders and contains the following data by part
number and work order.
1. Order due date
2. Order Quantity
3. Operations Completed
4. Operations Remaining
INPUTS OUTPUTS

Planned & Released Order

Load reports on planned and
From MRP Systems
Released orders
On key work centers
Refer Table 5.1

Loading Capacity
Verification reports from
From work center file
MRP system

CAPACITY
REQUIREMENT
Routing data from PLANNING
Routing file Capacity Modification Data
Refer Table 5.2

Alternate planned orders Rescheduling data from MPS

Figure 5.5 Inputs & Outputs To CRP

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Planned Order Releases

Planned order releases are inputs to CRP in assessing the total capacity required for the future
time period.
The data includes:
1. Planned order release date.
2. Planned order receipt date.
3. Planned order quantity.

Routing File

Routing is typically used as shop traveller that accompany the work from start to finish.
The necessary details of how to manufacture an item are found in routing file. Routing file
contains the following information.

1.Operations to be performed.
2.Seqeunce of operations.
3.Work centers in which the operations should be performed.
4.Possible alternative work centers
5.Tooling needed for each operation.
6.Standard times (Associated with each operations): setup times, and runtimes per piece.
7.Operator’s skills.
8.Inspection, operations and testing requirements.

The routing file along with the standard time estimates complete the basic input data necessary to
perform CRP.

Alternate Routing
The standard routing for an item is its primary routing. An item can also have one or more
alternate routings, which describe additional methods of manufacturing the same item. Alternate
routings are used when the primary routing is not available (which occurs due to capacity
constraints or equipment unavailability).
Alternate routing is considered when the primary work center is overloaded. However if alternate
routing leads to significant quality problems then revert to primary routing. It may so happen that
the primary work center produces parts that are cheap but in such case also alternate routing may
be considered in case the secondary work center may be under loaded.

Work center file

A work center as defined by APICS dictionary as a specific production area, consisting of one or
more people and /or machines with identical capabilities, that can be considered as one unit for
the purposes of capacity requirements planning and detailed scheduling. A work center is
composed of a number of machines or workers capable of doing the same work.
A work center can be any of the following:
1. A functional work center. This type of work center consists of similar machines that are
physically located together and have a range of slightly varying capacities and
capabilities.
2. A flow type work center. This work center considered as single work center having a
single capacity. The entire work center is run as a unit or not at all.
3. A group technology work center. This type of work center consists of dissimilar machines
that are arranged in a cell to produce group of products that are similar manufacturing
requirements.
4. A group project work center. This type of work center consists of group of workers,
working jointly on a single project.

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The work center file assimilates all the data related to work center such as information concerning
cost, capacity, lead-time, crew size, and function. Work center file is one of the prime inputs to
the CRP. It also provides work center capacity data to production scheduling, shop loading, and
capacity planning.
The work center file contains information on the capacity and move, waiting and queue time
associated with the center.
Queue time. It is a planned time a job waits at a work center before being handled. Queue time is
very significant in calculation of lead-time and capacity utilization. If there is high machine
utilization then there must be large queue time for job availability and flexibility improvement
and vice versa.
Waiting Time. It is the time a job is at the work center after the completion and before being
moved.
Move Time. It is the time taken to move the material from one work center to another.
Lead Time. It is the sum of queue, set up, run, wait, and move times. The lead-time is required to
place the workload in proper time period. It is here to noted that actual workload in the time
period is only the setup and run times even though there are in small part of the total lead-time.
However queue, wait and move elements are a part of the total time that do not use capacity but
are a part of it which use space and time.
Manufacturing Cycle. It consists of all the activities that occur to an item between the release of
an order to the shop and the receipt into the stores, or the shipment to the final customer.
Load Activity. Any activity that requires the resources or the capacity of a work center is called a
load activity. Time elements concerned with load activities are operation times whereas times
concerned with no load activities are called as interoperation times.
Internal and External Setup. Setup can be of two types external, which allows machine to
perform outside work and internal which absorbs the machine capacity.

Shop Calendar
The shop calendar contains information about the number of working days available.

5.10.2 CRP OUTPUT

Work center load profile and report. A load report is a comparative analysis of the expected
versus actual capacity usage in the department or at a work center. The work center load reports
shows future capacity requirements based on the released and the planned orders for each time
period on the production plan.
Load reports are very detailed and prescribe units of output required and labour by skill level or
even by employee required
See fig.

5.11 SCHEDULING STRATEGIES

Two terms are frequently associated with capacity requirement planning: forward scheduling and
backward scheduling.
Forward Scheduling. This begins with the planned order release from MRP, or the completion
date of the previous operations in line for open orders and works forward through the routing to
predict the earliest completion date for the order, it also shows the earliest completion date for
each operations.
Backward Scheduling. CRP most often uses the techniques of backward scheduling to place load
hours into work centers. Backward scheduling begins from the planned receipt date and work
backwards for all the lead-time elements in order to place the loads in correct time periods.

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Backward scheduling reveals, in addition to work center loads profiles, the latest possible start
date for each operation in work orders to achieve on-time completion.

5.12 INFINITE VERSUS FINITE LOADING

Infinite Loading
Infinite loading means calculating the work center loads by time period without regard to
capacity. It does not consider the existence of other shop orders competing for each capacity at
these work centers. This sometimes called as infinite scheduling systems, that is, it schedules jobs
as though capacity is infinite and takes no account of scheduling interference.
Planning to infinite capacity reveals potential overloads and under loads in various periods. CRP
often uses infinite loading on an initial low profile to evaluate or size up the propose load from
the MPS and help planners make decisions regarding the use of overtime, alternate routings etc.
The success of infinite loading is dependent on the initial capacity management, the flow of
orders, and shop floor prioritizing at each work center.
Finite Loading.
Finite loading is a technique that will not allow work to be loaded beyond the stated capacity of a
work center. It assumes there is a defined limit to available capacity at any workstation. If there is
not enough capacity available at a workstation because of other shop orders, the orders has to be
rescheduled in a different time period. The prioritizing of work is based on predetermined rules
such as work center completion date and operation availability.
CRP uses infinite loading in conjunction with backward scheduling, to generate the capacity
requirements plan, or work center load reports. Operation sequencing, which is a part of
production activity control, uses finite loading and various forms of scheduling. Before finite
loading can begin, however, priorities must be established for individual orders. The highest
priority orders get first claim on available capacity in each work

5.13 BENEFITS OF CRP

1. Provides time-phased visibility of load and capacity imbalances.
2. Confirms that adequate capacity exists on a cumulative basis across the planning
horizon.
3. Considers specific lot sizes and routings.
4. Uses a more precise estimate of lead-time than MRP.
5. Contributes to the elimination of erratic lead- times by providing data for the smoothing
of loads across work centers.

5.14 PITFALLS OF CRP

1. Applies primarily to job shop production.
2. Requires a great deal of computations, making computer processing almost mandatory.
3. Usually performs only a backward schedule and does not show where slack times might
be utilized for better balance.
4. Requires extensive input data.
5. Unable to give precise level of detail for day-to-day, short term decisions.

5.15 RESOURCE REQUIREMENT PLANNING VERSUS RCCP

Resource planning Rough-cut Capacity Planning

Inputs Production Plan. Master Production Schedule (MPS).
Product Groups or Items. Product and Component.
Period Quarterly/ Monthly. Weekly/ Daily.
No Offset. Lead-Time Offset.
Outputs Resource Plan. Rough-cut Capacity Plan.
Methods Bill of Resource. Detailed Product Load Capacity.

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 5.16 DIFFERENCE BETWEEN RCCP AND CRP
RCCP CRP
What • Projected gross Capacity. • Projected net capacity.
• Requirement for Key resources. • Requirement for each work center.

How Explode production plan or MPS through Explode MPS and MRP planned orders
resource profile. through detailed routings; combine
with current WIP status from shop floor
control.
When As require for simulation. Weekly, monthly.
Why • Pre-MPS I evaluation of MPS. • Post-MRP I detailed analysis.
• Intermediate- to- long- range • Periodic check of all work centers.
planning.
Precision Aggregate or gross key resources only. Detailed-considers inventory, lot sizing
WIP completions, works center lead
times.
Complexity Much less then CRP. Usually exceeds MRP.
Planning Productions plan limits. MRP Horizon.
Horizon
Implementation Short Require work centers, routings, MPS,
MRP I, and WIP status of SFC.
Rated Capacity

100

80

S 60
T Planned Load
A
N
D
A
R 40
D

H
O
U 20
R
S
Released Load

Period 1 Period 2 Period 3 Period 4 Period 5

144PERIODS
Table 5.1 WORK CENTER LOAD REPORT

PERIOD

TOTAL
Period 1 Period 2 Period 3 Period 4 Period 5

RELEASED LOAD 25 26 21 19 20 111

PLANNED LOAD 79 77 89 78 82 405

TOTAL LOAD 104 103 110 97 102 516

RATED CAPACITY 100 100 100 100 100 500

OVERLOAD 4 3 10 -3 2 16

Table 5.2 ROUTING FILE

Part Name: Gear Shaft

Drawing Number: D 123 X
Part number: SG 123
Operation Planned Set up time Run Operation Tooling
Number worked Time/Piece Description Required
orders
10 12 1.50 0.20 Turn Shaft

20 14 0.50 0.25 Mill slot

30 17 0.30 0.05 Drill 2 holes

40 03 0.45 0.10 Grind

50 Stores Inventory

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 Realistic?

Figure 5.7 The Production Planning Process.

EXAMPLE 5.2

A work center has the following open orders and planned orders for the period I. Calculate the
total standard time required on this work center in the period I from the following information.

Order Quantity Set Up Time Run Time

(Hrs/Piece)

Released Orders
Part A 150 1 0.5

Part B 200 1.5 0.6

Planned Orders
Part C 300 3.5 0.4

Part D 400 4 0.15

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Solution:
Planned orders Part A Total Time = 1+ (150 * 0.5) = 76 standard hours.
Part B Total Time = 1.5+ (200 * 0.6) = 121.5 standard hours.

Planned Orders Part C Total Time = 3.5+ (300 * 0.4) = 123.5 standard hours.
Part D Total Time = 4+ (400 * 0.15) = 64 standard hours.

Total time = 385 standard hours.

EXAMPLE 5.3

Calculate the capacity requirement per week for a company, which uses an MRP system.
Actual capacity requirement and forecasted demand are given in the Table below. Company plans
to adjust capacity when the cumulative deviation exceeds 1/3 of the forecasted average demand
per week.
Would this system necessitate any adjustment?

Table for Actual Capacity Requirement

Week 1 Week 2 Week 3 Week 4 Week 5

560 550 635 765 695

Table for Forecasted Demand

Week Week Week Week Week Week Week Week Week Week
1 2 3 4 5 6 7 8 9 10

620 580 425 735 630 645 695 560 630 480

Solution:

Average Forecast = 620+580+425+735+630+645+695+560+630+480

10
= 600

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 Weeks1 Weeks2 Weeks3 Weeks4 Weeks5 Cumulative
Deviation
Planned 600 600 600 600 600

205
Actual 560 550 635 765 695

Deviation -40 -50 35 165 95

Adjustment Requirement:

Permissible Cumulative Deviation = 1/3 * 600 = 200

Actual Cumulative Deviation = 205 (Which is greater than 200 that is the permissible Deviation)

So adjustment is necessary.

EXAMPLE 5.4 Lot Sizing with Capacity Constraints (Infeasible Case)

Period, i 1 2 3 4 5 6 Totals Comment

Capacity (c) 60 60 60 60 60 60 360 360<390

12
Lot Size (r) 50 80 40 80 20 390 Infeasible
0

Modified Lot Size (r’) 60 60 60 60 60 60 Backorder 30

Because the requirements are greater than the capacity, 390 > 360, a plan that meets all
requirements without exceeding capacity is infeasible. The total requirements are 30 units greater
than total capacity (390 – 360 = 30). Therefore, this solution must include 30 units of backlog in
addition to producing full capacity for all periods.

EXAMPLE 5.5
Capacity planning with scrap
Hint:
Capacity requirements can be calculated while considering the scrap rates. For example, if the
maximum production rate is 200 units per hour and the scrap rate at the process is 2%, then the
total amount of good units would be (200 – 0.02*200) = 196. Now, we can determine the
capacity and production requirements for equipments that proceed a given equipment. This is
demonstrated through an example.

The diagram below represents the production processes for three processors (equipment). From
the diagram, it can be seen that to produce one unit of P1 , we need to have 3 units of P1,1 and 2
units of P2,1 . Suppose the scrap rates at P1,1 is 20%, at P2,1 is 15% and at P1 is 30%. (These are

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very high and un-realistic numbers but are given for purpose of illustration) No inventory can
exist between P1 and P1,1 ; and between P1 and P2,1 .

To make the next explanation more clear, the notations to represents the process and the prior
processes are discussed as below:

Pk = A particular process k that will be observed. (Where k = 1, 2, 3….)

Pi,k = A process i occur before the particular process k . (Where i =1, 2, 3….)

ri,k = The required unit goods of process i to produce one unit good at process k

sk = Scrap rate at the particular process k

si,k = The scrap rate of process i

ck = Capacity at process k

ci,k = Capacity of process i to be used in the next process k

MaxPRk = Maximum production rate at process k .

MaxPRi ,k = Maximum production rate at process i
Now consider two different examples based on above information.
Question: Suppose that the maximum production rate at P1,1 is 200, at P2,1 is 170, and at P1 is 80
units per hour. Determine the capacity of process P1,1 and process P2,1 in equivalent good
finished units per hour.

r1,1 = 3

P1,1

P1
r2,1 = 2

P2,1

For P1 of good units would be: 160 (200 – 0.2*200 = 160. For the other two,

MaxPR1 *(1 − s1,1 )*(1 − s1 ) 200*(1 − 0.20)*(1 − 0.30)

c1,1 = = = 37.33
r1,1 3

MaxPR2 *(1 − s2,1 )*(1 − s1 ) 170*(1 − 0.15)*(1 − 0.30)

c2,1 = = = 50.58
r2,1 2

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Therefore, the maximum capacity of the above system is Minimum {160, 37.33, 50.58}= 37.33
Question: Given that the production rate of finished (good) product of P1 should be 100 units per

hour, what should be the minimum capacity rate of P1,1 and P2,1 ?

c1 r1,1 100*3
MinPR1,1 = = = 535.71
(1 − s1,1 )*(1 − s1 ) (1 − 0.20) *(1 − 0.30)
c1 r2,1 100* 2
MinPR2,1 = = = 336.13
(1 − s2,1 ) *(1 − s1 ) (1 − 0.15) *(1 − 0.30)

The minimum capacity (production rate/hour) for P1 should be: 100/(1-0.3)= 142.8.

EXAMPLE 5.6
For example, consider three parts A, B, and C. Assume part A is assembled in work center 1, part
B is fabricated in work center 2, and part C is received and prepared in work center 3. A
summary of the work center capacities is given below.

Machine
Work
Throughput
Part Center
(units/week)
A 1 50

B 2 35

C 3 100

The net requirements for each part are given below.

Net Requirement per Week Maximum

Weekly
Period, t 5 6 7 8 9 10 11 12 13
Requirements

Part A 0 0 32 40 30 42 40 48 32 48

Part B 0 32 32 30 42 40 48 32 0 48

Part C 29 64 60 84 80 96 64 0 0 96

Solution:
While comparing the two sets of information above, it becomes obvious that the net requirements
for part B exceed the capacity of work center 2. The current lot sizing is therefore infeasible, and
some form of corrective action is required. One option would be to adjust the previous lot sizes
to accommodate the over-scheduled weeks (see the heuristic for lot sizing with capacity
constraints above). The maximum capacity of the work center is exceeded three times (weeks 9,
10, and 11, and other alternatives (or a combination of alternatives) may be preferable.

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