Capacity utilization Essay

?Detailed in the Indalex Ltd. case analysis, current output signal is stretched to the limit, creating a capability constraint to meet future forecasted demand prevent the firms objective of a real growth rate of ten part annually. The issue of deciding on a capacity expansion plan, devoted uncertainty about near term economic projections was presented.Indalex concentrates on a competitive priority of proceeds quality, where flexibility and quality ar more than of a priority than price. This is described in the case study where quondam(prenominal) and current success of Indalex is attributed to their competitive strategy being strictly establish on three words service, service, service. Indalex set out with the objective of crack a seven-day service, along with fling highly qualified assistance in designing selection for their customers.Valuing service quality, Indalex manages a close working affinity with their customers, such as responding to needs even under short noti ce, demonstrating how Indalex understands their factories argon an integral part of their customers factories. I feel that maintaining reputation along with confrontation the growing demand of their existing customers is crucial to the service quality strategy of Indalex. In making a decision for the capacity expansion plan, an strain on insuring customer felicity and retention is of top priority.Given the survival of the fittests of all increasing capacity of their blow figure out, increasing anodizing capacity, building a cycle plant to reprocess scrap aluminum, or increase capacity of twain the extrusion and anodizing process a decision had to be made on which of the options should be done first, in order for the new piece of equipment to be available by the beginning of 1979. In regards to flexibility and quality, the option to any increase capacity of the extrusion, increase capacity of anodizing, or increasing capacity of both operations together offers machine flexi bility.Having excess capacity would provide Indalex to better manage complex orders, ultimately providing an advantage towards their focused service strategy. With the option of building a recycling plant, it would enable more process flexibility and better history management. However, this option would generate higher inventory holding costs, creating excess inventory of over a million dollars. along with requiring new employees with specialized skillsets, the options of adding a recycling plant wont solve the problem of increasing demand of customer.Anodizing petitions the plant to run at full capacity in order to be efficient, along with high-priced pollution control measures that would have to be taken. When looking into customer satisfaction and retention, customers will only be retained if Indalex increases capacity. When looking into capacity constraints, the extrusion process is the first area that I feel capacity constraints should be removed. With anodizing, the case d etails that much of the demand is a result from whirl related work.If there were a decrease in this area, anodizing operations would be effected. Unlike the extrusion process that allows Indalex to buy demand by offering a low bid for high volume orders if needed, anodizing operations are much more limited in sourcing a demand. Therefore, I would chose the option of increasing capacity of the extrusion plant which is the best option to consecrate Indalex with their ten percent growth objective, along with offering feasibility of impact an increase in demand, with flexibility and quality of their service.This expansion will require more employees to be hired, which will also reduce the amount of extra time that is currently required. The risk associated with increasing capacity of the extrusion plant is the thinker of the U. K. s economy not growing as rapid as predicted, leaving the question of what Indalex would do with the new press if it couldnt be filled naturally with deman d.