1. Differentiate between design capacity and capacity utilization.

2. Briefly describe three capacity expansion strategies.

3. An airline company must plan its fleet capacity and long-term schedule of aircraft usage. For one flight segment, the average number of customers per day is 70, which represents a 65 percent utilization rate of the equipment assigned to the flight segment. If demand is expected to increase to 84 customers for this flight segment in three years, and management requires a capacity cushion of 25 percent, calculate the following:-

a) the planned capacity requirement.

b) the maximum number of customers the flight segment can accommodate.

c) the efficiency rate of the flight segment assuming that the current effective capacity of the flight segment is 93 customers.