2001 Volume 9 Issue 2 Pages 65-75
Continuous improvement in companies is not only to strive to avoid waste for the sake of the best in the total, but also to secure the flexibility which is needed to realize customer satisfaction. In the meantime, effective management of companies’ capacity and redefinitions of capacity is essential to maintain a competitive advantage that is durable in international and competitive circumstances. It is necessary that the definition of capacity that companies select should include the structure that pursues continuous improvement. Profit that is brought to companies is determined by a trade-off between contribution margin of each product and service and costs except for those of variable products. The standards of capacity utilization that companies select for realization of the greatest profit need to agree with the most efficient trade-off. Therefore the capacity idea to be selected should be based on optimal capacity utilization that has the mechanism for maintenance of durability and flexibility.
