4.13 Key Terms
Key Terms
- Leading capacity: Where capacity is increased to meet expected demand.
- Following capacity: Where companies wait for demand increases before expanding capabilities.
- Tracking capacity: This adds incremental capacity over time to meet demand.
- Design capacity: Refers to the maximum designed capacity or output rate.
- Effective capacity: This is the design capacity minus personal and other allowances.
- Sequential process: Any process with several steps, one after another.
- Bottleneck: The slowest step in each process or the slowest process in a system.
- Economic considerations: Consider the cost, useful life, compatibility, and revenue for each alternative.
- Non-economic considerations: Include public opinion, employee reactions, and community pressure.
