Need assistance in answering the following: Jill is concerned that the latest sh

Question

Need assistance in answering the following:

Jill is concerned that the latest short term demand forecast for dog grooming at her Fifteenth Street Dog Salon, is higher than her salon capacity. As she doesn't want to turn business away, she must find a solution to optimizing the capacity utilization rate, capacity focus, capacity flexibility, and capacity levels at this business. Discuss how she should approach this problem and describe the options that she has in capacity planning at her dog salon.

Explanation / Answer

Jill here has to choose between two options ahead of her: does she want to build additional capacity to meet this demand, or she wants to keep her current capacity intact and manage this demand rise through other means. To make this decision, Jill needs to ensure that this short term demand rise is only short term, and will not be a consistent phenomenon. If the demand rise is sure to be only for a short term, then adding additional capacity, i.e. incurring considerable investment for it is not justified.

Capacity = no or equipment/machines/workforce * no of shifts * utilization * efficiency

If the demand rise is short term, then Jill needs to choose from outsourcing the increased demand or increasing the utilization of her current capacity. For Outsourcing her demand, Jill needs to assess the cost-benefit ratio for increasing her capacity and outsourcing, and chose the option with better results. Maintaining the required quality is also a consideration in outsourcing which Jill will need to take care of. She can also chose to hire part-time workforce for the time being to work in additional shifts, or use overtime or additional shifts for her current workforce to absorb the higher demand. Lastly, Jill can work towards improving efficiency of her current process to ensure that more demand can be served through her current capacity.

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