Pharmaceuticals Have Challenging Capacity Decisions

Capacity Management in Operations

	Capacity defined
	Strategic capacity planning defined

Capacity Planning Concepts

Economies and diseconomies of scale	Best operating level defined
The learning curve	Capacity utilization rate defined
Where economies of scale meet the learning curve	Capacity focus defined
the learning curve	Economies of scope defined
Capacity focus
Capacity flexibility

Capacity Planning

Considerations in adding capacity	Capacity cushion defined
Determining capacity requirements
Using decision trees to evaluate capacity alternatives

Planning Service Capacity

Capacity planning in service versus manufacturing

Capacity utilization and service quality

Conclusion

Case: Shouldice Hospital—A Cut Above