Capacity Planning

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CAPACITY PLANNING

ALLAMA IQBAL OPEN UNIVERSITY (AIOU) ISLAMABAD
PREPARED BY: HUMA NOOR (REG: AO595884)
PREPARED FOR: MISS SANOOBAR
SUBJECT NAME: PRODUCTION AND OPERATION MANAGEMENT
SUBJECT CODE: 8509
STUDY CENTURE: UNITEC (ISLAMABAD)

To my dearest and best friend’’ Raheela Khan’’…..Who support me and help me in making report. My family especially my ‘’Mother,’’…….who encourage me and because of whom I’m here for higher education and only with her support and prayers I have come to be a successful professional and good human being. My all friends, with their best wishes and prayers I’m going forward toward my goals and my all teachers who encourage and support us.

Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. In the context of capacity planning, "design capacity" is the maximum amount of work that an organization is capable of completing in a given period, "effective capacity" is the maximum amount of work that an organization is capable of completing in a given period due to constraints such as quality problems, delays, material handling, etc. The phrase is also used in business computing as a synonym for Capacity Management. We have discussed the Capacity planning in Nestle in this report. The problem of seasonality and demand fluctuation also affects Nestle – the chocolate giant. Demand for chocolate increases mainly during the winter season (around Christmas and Easter holidays) and drops off during the summer. The company uses level capacity plan to deal with demand fluctuations by keeping some products in storage for season peaks. Capacity management and planning during the crisis of seasonality at Nestle is a major issue. The company uses a combination of various capacity plans (depending on the situation) to adjust demand and fight seasonality.

Capacity
Capacity is the ability to hold a fluid, very similar to volume. Capacity may also refer to:
* Productive Capacity, in economics, management and engineering, refers to the maximum possible output of a system * Capacity utilization, in economics, the extent to which an enterprise or a nation actually uses its potential output * Capacity (law), the legal ability to engage in certain acts, such as making a contract * In decision theory, a capacity is a subjective measure of likelihood of an event, similar to a membership function in fuzzy logic * Capacity of a set, in mathematics, one way of measuring a set's size * Battery capacity, in electrical engineering, a measure of a battery's ability to store electrical charge * Heat capacity, in physics and chemistry, the amount of heat required to change a substance's temperature * Carrying capacity, in biology, the ability of an environment to sustain populations * Channel capacity, in communications

* Combining capacity, in chemistry, number of chemical bonds formed by the atoms of a given element * Nameplate capacity, in power plants, the general number of Megawatts technically available * Capacity factor, in power plants, an operations ratio

Planning
Planning (also called forethought) is the process of thinking about and organizing the activities required to achieve a desired goal.

Planning involves the creation and maintenance of a plan. As such, planning is a fundamental property of intelligent behavior. This thought process is essential to the creation and refinement of a plan, or integration of it with other plans; that is, it combines forecasting of developments with the preparation of scenarios of how to react to them. An important, albeit often ignored aspect of planning, is the relationship it holds with forecasting. Forecasting can be described as predicting what the future will look like, whereas planning predicts what the future should look like.[1] The counterpart to planning is spontaneous. Psychological...
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