Demand Calculation

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A successful response will fully answer each question. Please make sure you document your work and provide sufficient explanations on how you got to each answer.

1. Distinguish between design capacity and system capacity.

2. A manufacturer of TV watches uses three TRS7 electronic chips in each TV watch produced. Demand estimates for the number of TV watches that could be sold next year are shown.

toA. Assuming the firm decides to produce on an expected value basis, how many TRS7 chips should they plan to produce for next year’s sales?

B. What capacity is required to meet 150 percent of expected demand.

3. An automatic drive-in teller at American National Bank has the capacity of handling 2,000 entries per regular banking day (according the firm that sold it to the bank). However, because of limitations imposed by automobile access, the teller is available only 60 percent of the time. It is actually being used for about 800 entries per day. What is the system efficiency?

 

 

 

Sample Solution

Capacity is the throughput or number of units can hold, receive, store, or produce in a period of time. Design capacity is whatever the design can handle, which is a necessary limitation of the design. System capacity is the specific capacity of any particular instance of the design. System capacity would then necessarily be less than or equal to the design capacity. For many companies designing capacity can be straightforward. To measure capacity we need units of output. If the variety of products produced at a work center or in a plant is not large, it is often possible to use a unit common to all products.

While a set of frameworks complement and build on each other, the delineation of the concept focuses heavily on vertical versus horizontal dimensions in a time-sliced fashion. That is, time dimension in accountability has not been of primary importance. However, it is worth noting that the time dimension is closely interrelated with a series of conceptual distinctions made in previous literature, and it may cover complementary aspects of the question concerning two sequential lines represented by administrative responsibility versus political accountability. First, the positioning of accountability actors depends on the time dimension. Civil servants usually have longer terms to serve the public interest over the long term. At the same time, they are responsible to the elected representatives of the public who tend to have “a limited time horizon” and “prefer policies that yield tangible benefits for constituents in the near term” (Posner, 2004: 137). For this reason, the priorities expressed by elected officials may be far more related to short-term issues and temporal problems instead of long-term solutions, whereas the long-lasting forms of civil service personnel would prioritize sustainable solutions to secure a long-term perspective of the citizens, both current and in the future. Second, the time frame is essential to distinguishing between two main streams of accountability. Accountability mechanisms focus predominantly on retroactive accountability for the past outcomes, while accountability as a virtue takes a proactive approach to ensuring ethical behaviors in the future. The timeline is also useful to distinguishing between ex ante accountability of the decision-making process leading up to the decision and ex post accountability where the results available from the decision already taken or where questions of compliance are identified and addressed. In other words, ex ante accountability refers to being accountable for the decision before an administrator act, while ex post accountability is suggestive of situations where administrators are accountable for the outcome of their decisions. For example, the focus of traditional bureaucratic administration is very much

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