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Chapter 4: Q4PE (page 650)

Goldratt argues that, rather than capacity, this should be balanced.

Short Answer

Expert verified

Flow.

Step by step solution

01

Define capacity

Capacity is referred to as the highest output level that an organization can sustain for producing a product or offering a service.

02

Analyze

Goldratt argued that it is important for organizations to balance the flow instead of capacity. It is important to balance the flow because it will help balance the capacity and demand, as both of these aspects depend on flow.

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Most popular questions from this chapter

A pure strategy that uses inventory and backorders as part of the strategy to meet demand.

Logic is used to calculate the needed parts, components, and other materials needed to produce an end item.

Given the following history, use a three-quarter moving average to forecast the demand for the third quarter of this year. Note, the 1st quarter is Jan, Feb, and Mar; 2nd quarter Apr, May, Jun; 3rd quarter Jul, Aug, Sep; and 4th quarter Oct, Nov, Dec.

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Last year

100

125

135

175

185

200

150

140

130

200

225

250

This year

125

135

135

190

200

190

Assume that you are using exponential smoothing with an adjustment for trend. Demand is increasing at a very steady rate of about five units per week. Would you expect your alpha and delta parameters to be closer to one or zero?

Why is the MRP process referred to as an “explosion”?
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