Models and techniques useful for capacity planning

  • Present value analysis: It is used to evaluate the time of capital investment and fund flows.
  • Aggregate planning models: it is useful for examining the way of using the examining the way of using the existing capacity in the short terms.
  • Break even analysis: to determine the minimum break even volumes of production.
  • Linear programming: this is helpful in determining the optimum product mix for maximizing contribution, considering the capacity constraints.
  • Computers simulation: it is helpful to determine the effects of various scheduling policies.
  • Decision tree analysis: this can be applied for long term capacity problems.
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