Capacity Management and Performance Objectives in McDonald's

Case study
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Table of Contents
INTRODUCTION...........................................................................................................................3
Q-1 What approaches does McDonald seem to take for its capacity management to reconcile
capacity and demand?..................................................................................................................3
Question 2 Analyze the implementation of four Ds by the McDonald Restaurant?...................4
Question 3 Evaluate what the five performance objectives mean for the operation in
McDonalds?.................................................................................................................................4
Q-4 are encouraged to use calculations to prove any challenges if there is any and suggest any
solutions.......................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
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INTRODUCTION
Operation management refers to managing of business practices in effective way in order to
maintain efficiency and attain goals and objectives. There are various types of operations
performed within organisation. It require to ensure that efficiency of operations is maintained.
This is done by setting of certain standards and improving process. So, on basis of that overall
operation process works (Allen, and Carlson, 2018). However, there are some performance
objective set as well which has to be attained. In this report it will be described about a case of
McDonald and questions to be answered in it.
Q-1 What approaches does McDonald seem to take for its capacity management to reconcile
capacity and demand?
There is need to manage capacity in order to manage supply and demand. For that there
are various types of capacity management which is applied to acquire resources. Thus, by
analyzing the case study it can be identified that McDonald uses inventory appraisal for its
capacity management. In that they uses just in time management approach in which goods and
raw materials are acquired when it is needed to be used in production of products. By using this
it has led to decrease in cost. Moreover, it has led to control in production. However, it has been
identified that McDonald has followed approach of demand management. In that they are able to
forecast, plan and then manage demand for products (Anaf, and et.al., 2017). So, with that they
are able to manage supply and also maintain balance of capability of supply chain. In this no
forecasting is done of demand. Along with that, company also follows approach of level
capacity. Here, they do plan and forecast to supply demand in proper way. The forecast is done
for a particular period of time. Thus, quantity of output is equal to expected demand of that
particular period.
Therefore, using of these has led to managing capacity of production process and meeting
demand. Moreover, stock maintained is enough to meet demand. So, inventory levels are less
and it has resulted in controlling of production and leading to decrease in cost. Hence, overall
cost of production has reduced and also efficiency of it has improved. Besides, JIT approach has
been integrated within operational process so it has led to smooth flow of production process.
With that they are able to control inventory stock and production process. It also has led to
reducing cost of production.
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