Capacity Planning And Timing Strategy Business Essay

This study discusses a instance survey on capacity planning and installation location at Georgia Pacific a company that has undergone growing. The instance survey illustrate the importance of growing and its linkage to the environment.

The study foremost get down with specifying the capacity planning and control so looks at capacity-timing scheme Georgia Pacific uses and the factors that influence this scheme. Then looks at major factors that it used to do its capacity enlargement determination and what other factors might the company have considered. The study so farther explicate the technique Georgia Pacific used to do its installation location determination and what other installation factors might the company have considered.

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Besides the study looks at how environmental considerations affect capacity planning and installation location at Georgia Pacific and in conclusion in my ain sentiment explain if Georgia Pacific has made the right capacity planning and installation location. Finally the study concludes with Georgia Pacific production manner, the mode in which the company operates as a squad, its environmental consideration and determination devising procedure.

Definition on capacity planning

In operations direction, capacity is referred as an sum of the input resources available to bring forth comparative end product over period of clip. ( commendation )Strategic capacity planning is of import in an administration chiefly because its facilitate the administration to run into its hereafter demands. Planing warrant that operation cost are kept at a minimal degree without impacting the quality, it besides guarantee that administration remain feasible to achieve its long-run program for enlargement

Capacity planning and timing scheme

Long scope capacity planning and command chiefly depends on a scope of factors and some of the factors Georgia-Pacific used base on the on alterations in capacity areMarket conditions: The timing of the market and doing a determination base on the market gives the administration a competitory border every bit good as an addition in market portion. Georgia-Pacific have used these scheme to increased its production capacity base on the alterations in the market, as the market grew production was increased so as to run into the demand.Technology: The alteration in the engineering means administration, required fewer resource to run its production and hence this means that with the progress engineering Georgia-Pacific can increase its production ability with merely little equipment alterations.Equipment: So to accomplish a big additions in production capacity, Georgia-Pacific usage bettering the already bing equipment, or put up new equipment,The major factors that influence the purchasing of sawmill is because of the strategic location of the sawmill and since the capacity of the sawmill was restricted in 1970 when it was first reinforced purchasing it 1987 and spread outing the operation such as adding drying kilns, a contriver factory for completing on site and a warehouse for hive awaying the finish timber to improved production capacity and the fact that the works has the basic equipment and the has company owned woods in the country were more economically feasible.

Factors make up one’s minding the enlargement

The timing in doing a determination to spread out a concern is critical, as you need to carefully analyze the financial benefits of such enlargement such as measuring holding the hard currency for the investing to provide for the extra stock list, new installations or equipment. At Georgia-Pacific the assorted factors considered in make up one’s minding whether to purchase and spread out the sawmill in Florida for illustration areMarket conditions: Florida has an first-class market status such as the speedy growing of population and the roar in place building because of these strategic place of the location of Florida gave Georgia-Pacific an border over their rivalsNatural stuffs aa‚¬ ” Georgia besides considered this site because it ain wood in the country that besides had other place of in private owned lumber.Environment- That the other major factors to see was statute law and authorities policies sing the environment Georgia Pacific considered this factor and assessed the environmental ordinance of Florida and happen out that Florida has more rigorous environmental ordinances that make it difficult to construct a new works than to get an bing works.

Economics- This is a major factor to considers when be aftering for capacity enlargement as this affect the economic viability of the organisation. Georgia Pacific has considered this factor by analyzing the return on investing when geting installations and found out that geting and spread outing was much easier and economically feasible that constructing new installations.Labor aa‚¬ ” The handiness of labour both accomplishment and unskilled is really of import when sing doing a determination for capacity enlargement.

As for Georgia pacific the nearby installation mean that the sawmill could pull some trained forces.Equipment aa‚¬ ” As for a long term capacity enlargement the handiness of equipment to transport the operation is a major factor to see. For Georgia pacific the already bing sawmill had the vital required equipment and installations such a working route system, a nearby rail route goad, and electricity installations.Overall at Georgia Pacific acquisition of the sawmill offered exceeding potency for capacity enlargement and the sawmill was expanded in 1998 hence greatly contributed to the success of the Georgia Pacific.

What other factors might the company have considered

Other factors include

Facilities location determination

The determination on where to turn up installations is the most of import factors in capacity planning and its where the success of the company depends. Facility location involves administration seeking to turn up, relocate or spread out their operation, the determination procedure encompasses the designation, analysis and rating of a choice among alternate,Since at Georgia Pacific installation location largely involves long term committedness of resources the determination on where to turn up installations are chiefly affected by several factors such as fiscal, capacity and engineering every bit good as political, economic and social..However in the instance survey at Georgia pacific corp.

the chief focal point of consideration are natural stuff, market status labour force, authorities ordinance and policies and eventually energy public-service corporationsMarket condition- Georgia Pacific asses the market status by functioning so every bit know the demand and topographic point the merchandise near to the location.Natural materials- Georgia Pacific reappraisal the handiness of altogethers so to hold equal supply of locally available natural stuffs at a low monetary valueGovernment regulation- Georgia Pacific choose where the province and local authorities welcome companies by looking at factors where they have relax revenue enhancement and environmental policies every bit good as attitude of the local towards industry such as FloridaLabor- Georgia Pacific have assessed the handiness of local work force that can be easy developUtilities- Georgia Pacific have considered the handinesss of all public-service corporations necessary such as such as H2O, electricity and natural gas.Other factors that Georgia Pacific could hold besides see could be the handiness of less expensive land with a bigger infinite every bit good as land with quality and efficiency installations such as such as roads, Bridgess, H2O and sewer systems, airdrome and lading installations, energy systems, and telecommunications.

Besides there other important factor that George Pacific could see could be the cost of transit in footings traveling the merchandise every bit good as the supply cost. For illustration propinquity to supplier can be first-class for JIT production as it improves public presentation of bringings and reduces stock list every bit good as cut downing cost.

Environmental consideration

In general environmental consideration is portion of capacity planning and installation location. It was paramount that Georgia Pacific makes itself environmental friendly. Since Georgia Pacific depends on lumber as a natural resource, they need to measure location where environmental policies are either relax or less rigorous.

For illustration Georgia Pacific had to purchase the sawmill in Florida with rigorous environmental regulations that makes it more hard to construct a new installation.In order to cut down pollution caused by transit Georgia Pacific corp. have considered turn uping the stuff stopping point to the site by spread outing operation such as adding drying kilns, a contriver factory for coating and a warehouse for hive awaying the finish timber on site.besides taking municipal sewerage disposal system on site at skippers site, besides the skipper was near an first-class lumber base and a nearby rosin works that uses the remainders

Opinion on Georgia Pacific

It is believe that Georgia Pacific has made the right capacity planning and installation location since all consideration were carefully analyses and determination made base on the out came. The chief accent was the market status and the natural stuffs.

The market status was of import because it focuses on the merchandise demand, every bit the handiness and the location of natural stuffs so as to cut down the cost of transit as good and run into the demand of the authorities or province environmental policy on industries all the factor discuss above were carefully consider by Georgia pacific corp. therefore execute a well program capacity planning and installation location.


In the instance analyze it looks like at Georgia Pacific the accent is on growing, and so capacity addition and acquisition is a manner of life.

It assesses possible addition of capacity by working as a squad to beg suggestion and obtaining information and utilize a cheque list for major factors such as make up one’s minding on market demand, engineering equipment and labour. Besides since the company depends on lumber as a natural resource environmental consideration is every bit of import.All of the above factors are really of import portion and parceled in determination devising on capacity planning and installation location.The factors listed on this study are really important when doing capacity determinations. Capacity planning is a really of import facet in fabrication companies, as it to make with run intoing the clients demand. They besides have a long term impact. Capacity besides determines the choice of appropriate engineering, type of labor and equipments. The right capacity ensures economically feasible concern


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