What is capacity planning and control? How are demand and capacity measured?…

What is capacity planning and control?

How are demand and capacity measured?

What are the alternative ways of coping with demand fluctuation?

A local government office issues hunting licences. Demand for these licences is relatively slow in the first part of the year but then increases after the middle of the year before slowing down again towards the end of the year. The department works a 220-day year on a 5-days-a-week basis. Between working days 0 and 100, demand is 25 per cent of demand during the peak period which lasts between day 100 and day 150. After 150 demand reduces to about 12 per cent of the demand during the peak period. In total, the department processes 10,000 applications per year. The department has 2 permanent members of staff who are capable of processing 15 licence applications per day. If an untrained temporary member of staff can only process 10 licences per day, how many temporary staff should the department recruit between days 100 and 150?

In the example above, if a new computer system is installed that allows experienced staff to increase their

work rate to 20 applications per day, and untrained staff to 15 applications per day, (a) does the department

still need 2 permanent staff, and (b) how many temporary members of staff will be needed between days 100 and 150?

A field service organization repairs and maintains printing equipment for a large number of customers.

It offers one level of service to all its customers and employs 30 staff. The operation’s marketing vice-president has decided that in future the company will offer 3 standards of service, platinum, gold and silver. It is estimated that platinum-service customers will require 50 per cent more time from the company’s field

service engineers than the current service. The current service is to be called ‘the gold service’. The silver

service is likely to require about 80 per cent of the time of the gold service. If future demand is estimated

to be 20 per cent platinum, 70 per cent gold and 10 per cent silver service, how many staff will be needed

to fulfil demand?

Consider how airlines cope with balancing capacity and demand. In particular, consider the role of yield

management. Do this by visiting the web site of a low-cost airline, and for a number of flights price the fare

that is being charged by the airline from tomorrow onwards. In other words, how much would it cost if you

needed to fly tomorrow, how much if you needed to fly next week, how much if you needed to fly in 2 weeks, etc. Plot the results for different flights and debate the findings.

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