CAPACITY BILLS (CB) METHOD

Reference work entry
DOI: https://doi.org/10.1007/1-4020-0612-8_121

The Capacity Bills (CB) method is one of the techniques that can be used for a company's resource requirements planning (RRP, i.e., roughcut capacity planning, RCP). Compared with the overall factors (OF) method, the CB method provides more direct linkage between individual end products in the master production schedule(MPS) and the capacity required for individual work centers. Consequently, it requires more data than the OF procedure. Bill of materials and routing data are required, and direct labor-hour or machine-hour data must be available for each operation. A bill of capacity indicates total standard time required to produce one end product in each work center required in its manufacture. The capacity requirements at individual work centers can be estimated by multiplying the capacity bills by the MPS quantities. Estimates obtained from the OF method are based on an overall historical ratio of work between work centers, whereas capacity bill estimates reflect the actual...

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Reference

  1. Berry, W. L., T. G. Schmitt, and T. E. Vollmann (1982). “Capacity planning Techniques for Manufacturing Control Systems: Information Requirements and Operational Features,” Journal of Operations Management, 3(1), pp. 13–25.Google Scholar

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© Kluwer Academic Publishers 2000