QUESTION $4$

a$.$ What factors should be considered when selecting the appropriate capacity cushion? How

does the choice of capacity cushion relate to other decisions in operations management?

To other functional areas? $[8$ marks$]$

b$.$ Capacity planning requires a demand forecast for an extended period of time into the

future. What concerns would you have regarding an extended forecast as a capacity

planner? $[5$ marks$]$

c$.$ Christopher's Cranks uses a machine that can produce $100$ cranks per hour. The firm

operates $12$ hours per day, five days per week. Due to regularly scheduled

preventive maintenance, the firm expects the machine to be running during

approximately $95\%$ of the available time. Based on experience with other products,

the firm expects to achieve an efficiency level for the cranks of $75\%.$ What is the

expected weekly output of cranks for this company? $[5$ marks$]$

d$.$ An executive conference center has the physical ability to handle $1,500$ participants.

However, conference management personnel believe that only $1,300$ participants can be

handled effectively for most events. The last event, although forecasted to have $1,300$

participants, resulted in the attendance of only $1080$ participants.

i$.$ Calculate the utilization rate of the conference facility. $[4$ marks$]$

ii$.$ Calculate the efficiency of the conference facility. $[3$ marks$]$