Production reserve

From CEOpedia | Management online
Jump to: navigation, search

Reserve capacity (Rc) is the difference between the size of the calculated capacity (Cc) and achieved the size of production in the enterprise (Pr).

Rc = Cc – Pr [unit production]

The presence of reserves is required because of risk of economic processes. The size of the reserves must be subject to optimization containing maintenance costs and changing market demand. Knowledge of production capacity is necessary to determine the increase in production (not requiring additional investments), and for the determination of improving the efficiency of investment processes.

Intensive Reserve

They can be used by:

  • reduce machine time per unit of the product
  • reduce the participation of auxiliary time and other components in general time of operation
  • elimination of non-productive run of machines

Extensive Reserve

Extensive reserves are connected with idle operation of machinery and equipment

  • Downtime – device idle time due to lack of workers or during refurbishment, * Whole shift downtime - caused by prolonged preparatory time of machinery and equipment.
  • Loss - breaks due to lengthy repairs, accidents, lack of materials, and other organizational issues
  • Breaks during the work day - regular break for employees to reduce fatigue. Some downtime due to the fault of the worker: the absence of work, being late to work, early finishing of work.

References