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Capsim production costs activity

12/11/2020 Client: papadok01 Deadline: 3 days

Capacity Analysis

Capacity Analysis

Capacity analysis is essential to understanding how you and your competitors are supplying the market demand. There is often unmet demand in segments because companies do not or cannot produce enough units, if you successfully analyze industry capacity, you team could benefit from these shortfalls. You will need:

· The Production Analysis report (page 4) of the Capstone Courier for Round 0

Each product has its own production line where you can set capacity and automation. Balancing the costs of increasing capacity and automation against future sales of that product is key to managing the Production department. The activity walks you through finding the information you need to calculate the industry capacity levels and the costs involved in increasing automation and capacity. On the Production Analysis page, look at the table of products (the Andrews company is displayed below). The highlighted boxes (plus a little math!) are where you will find the information you need to complete the analysis.

http://new.capsim.com/modules/GIA/files/2016C_0/0/Capstone/EN/images/Production.png

Production Costs Activity

In the table below, the first two sections have two columns – Company and Industry - for each segment. These are for the raw plant capacity and the maximum capacity of each product and segment. Automation Level is the product line automation and the last two sections are to calculate the costs of plant improvements, in this case doubling capacity and maximizing automation. How to complete the table using the Production Analysis page of the Courier

First Shift Capacity

First and Second Shift Capacity

Automation Level

Cost to Double Capacity

Cost to Raise Automation to 10

Company

Found under "Capacity Next Round"

Capacity Next Round x 2 (shifts)

Found under "Automation Next Round"

Increasing capacity is $6 per unit with an adjustment for automation.

Increasing automation is per unit of capacity

Industry

Total the capacity of each product in that segment

Total capacity of each product in that segment X 2

Formula is: First Shift Capacity x [$6 + ($4 x automation level)] Example Input: 500

Formula is: First Shift Capacity x [$4 x (10 - automation level)] Example Input: 700

*In the simulation, the input cells are in thousands (‘000’s), so an input of 1 is actually 1000 units. So, in the example below 500,000 units is inputted as 500 in the cell. This applies to dollar values as well. Incomplete

Capacity Analysis

Segment

Product Name

First Shift Capacity

First & Second Shift Capacity

Automation Level

Cost to Double Capacity

Cost to Raise Automation to 10.0

Company

Industry

Company

Industry

Traditional

Low End

High End

Performance

Size

Previous

Bead

Bid

Bold

Budd

Bake

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