1.        A process currently services an average of 50 customers per day. Observations in recent weeks show that its utilization is about 90 percent, allowing for just a 10 percent capacity cushion. If demand is expected to be 75 percent of the current level in 5 years and management wants to have a capacity cushion of just 5 percent, what capacity requirement should be planned?

To determine the required capacity for the process in 5 years, we need to calculate the planned capacity using the given information.

### Step 1: Current capacity
- **Current demand** = 50 customers/day
- **Current utilization** = 90% (0.90)
- **Capacity cushion** = 10% (0.10)

The formula for calculating capacity using utilization is:

\[
\text{Capacity} = \frac{\text{Demand}}{\text{Utilization}}
\]

Using the given values:

\[
\text{Current capacity} = \frac{50}{0.90} = 55.56 \text{ customers/day}
\]

### Step 2: Future demand
It is stated that demand will be 75% of the current level in 5 years:

\[
\text{Future demand} = 0.75 \times 50 = 37.5 \text{ customers/day}
\]

### Step 3: Future capacity cushion
The desired capacity cushion is 5% (0.05). This means the future utilization will be 95% (1 - 0.05 = 0.95).

### Step 4: Future capacity requirement
Now, using the future demand and desired utilization:

\[
\text{Future capacity} = \frac{\text{Future demand}}{\text{Future utilization}} = \frac{37.5}{0.95} = 39.47 \text{ customers/day}
\]

### Conclusion:
The process should plan for a capacity requirement of approximately **39.47 customers per day** in 5 years.

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Would you like more details or clarifications on any part of this?

Here are 5 related questions:
1. How does utilization affect capacity requirements?
2. What is the role of a capacity cushion in operations management?
3. How would an increase in future demand affect capacity planning?
4. What other factors could influence capacity planning aside from utilization and demand?
5. How can businesses ensure they are prepared for fluctuating future demand?

**Tip:** When planning for future capacity, consider both demand forecasts and potential efficiency improvements to ensure long-term sustainability.

A process currently services an average of 50 customers per day. Observations in recent weeks show that its utilization is about 90 percent, allowing for just a 10 percent capacity cushion. If demand is expected to be 75 percent of the current level in 5 years and management wants to have a capacity cushion of just 5 percent, what capacity requirement should be planned?

Discover how to calculate future capacity requirements when current demand, utilization, and capacity cushion are known. This problem walks through detailed steps using formulas for capacity planning and is suitable for college-level students studying operations management or business studies.

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