FUERZAS, NOEMI KARLA N. BA 2102 OPERATIONS MANAGEMENT
Topic 9- Capacity Planning
1. Name one important factor to consider when making capacity decisions. Explain.
The most important parts of effective capacity are process and human factors. Process factors
must be efficient and must operate smoothly, if not the rate of output will significantly
decrease. Human factors must be trained well and have experience, they must be motivated
and have a low absence and labor turnover. In resolving constraint issues, all possible
alternative solutions must be evaluated.
2. What kind of major changes could take place in Arnold Palmer Hospital’s demand
forecast that would leave the hospital with an underutilized facility? (What are the
risks connected with this capacity decision?)
In the Arnold Palmer Hospital, some changes should be done after collecting the information
about the demands of the customers. Arnold Palmer Hospital management use this approach
because it minimizes risk. However, lead capacity strategy has some risk. Capacity decision
based on lead strategy, and disadvantage to this strategy is that it often results in excess
inventory, which is costly and often wasteful. In case of Arnold Palmer Hospital when actual
demand is not equal to the forecasted demand it might be a risk and waste of so many
resources like unused beds, equipment, machinery etc.