Across different industries there are many examples of fixed capacity batch size production for example:-

• Mixing Vessels for food preparation
• Aging Tanks for beverages
• Kilns for making bricks
• Non-continuous Ovens for bakeries
• Furnaces for melting metals

These types of resource affect:-

• Process time for a manufacturing order
• Costing of resoMedia Libraryurces, fixed and variable overheads

The example below illustrates when using a fixed capacity resource, the total time and cost will be same regardless if the production order quantity is for 1000 KG or 750 KG. The resource time is based on a fixed time basis, therefore the resource is used for the full fixed time, even though the second cycle is only for 250 KG.

 

Production Quantity	Resource	Fixed Time	Resource Cycle Capacity	No.of Cycles	Total Time
1000 KG	Mixing Vessel	1 Hour	500 KG	2	2 Hours
750 KG	Mixing Vessel	1 Hour	500 KG	2	2 Hours

 

 

 

 

Production Quantity	Resource	Hourly Rate	Fixed Overhead	Variable Overhead	No. of Cycles	Total Time	Total Cost
1000 KG	Mixing Vessel	10	2	2	2	2 Hours	28
750 KG	Mixing Vessel	10	2	2	2	2 Hours	28