Outline
                                Outline
             Capacity
                 Capacity
                   Design and Effective Capacity
                      Design and Effective Capacity
                   Capacity and Strategy
                      Capacity and Strategy
                   Capacity Considerations
                      Capacity Considerations
                   Managing Demand
                      Managing Demand
             Capacity Planning
                 Capacity Planning
  © 2006 Prentice Hall, Inc.                                             S7 – 2
                 Outline – Continued
                 Outline – Continued
              Breakeven Analysis
                   Breakeven Analysis
                    Single-Product Case
                        Single-Product Case
                    Multiproduct Case
                        Multiproduct Case
              Applying Decision Trees to 
                   Applying Decision Trees to 
                   Capacity Decisions
                   Capacity Decisions
  © 2006 Prentice Hall, Inc.                                             S7 – 3
                 Outline – Continued
                 Outline – Continued
          Applying Investment Analysis to 
               Applying Investment Analysis to 
               Strategy-Driven Investments
               Strategy-Driven Investments
                Investment, Variable Cost, and 
                    Investment, Variable Cost, and 
                    Cash Flow
                    Cash Flow
                Net Present Value
                    Net Present Value
  © 2006 Prentice Hall, Inc.                                             S7 – 4
                 Learning Objectives
                 Learning Objectives
        When you complete this supplement, 
         When you complete this supplement, 
        you should be able to:
         you should be able to:
        Identify or Define:
         Identify or Define:
                  Capacity
                      Capacity
                  Design capacity
                      Design capacity
                  Effective capacity
                      Effective capacity
                  Utilization
                      Utilization
  © 2006 Prentice Hall, Inc.                                             S7 – 5
                 Learning Objectives
                 Learning Objectives
       When you complete this supplement, 
       When you complete this supplement, 
       you should be able to:
       you should be able to:
       Describe or Explain:
       Describe or Explain:
           Capacity considerations
                Capacity considerations
           Net present value analysis
                Net present value analysis
           Break-even analysis
                Break-even analysis
           Financial considerations
                Financial considerations
           Strategy-driven investments
                Strategy-driven investments
  © 2006 Prentice Hall, Inc.                                             S7 – 6