Capacity

In: Business and Management

Submitted By samhitha
Words 6033
Pages 25
Capacity to contract

One of the essentials of a valid contract, mentioned in section 10, is that the parties to the contract should be competent to make the contract. According to section 11 :
“Every person is competent to contract who is of age of majority according to law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject.”
It means that the following three categories of persons are not competent to contract. 1. A person who has not attained the age of majority, i.e., one who is minor. 2. A person who is of unsound mind 3. A person who has been disqualified from contracting by some law.

Although the above mentioned categories of persons are not competent to contract, yet they may sometimes be making some bargains, taking some loans, or be supplied with some goods by third parties, or be conferred with some benefits etc., the position of such person in such like situations is being discussed below.

THE POSITION OF A MINOR
Who is a minor ?
A person who has not attained the age of majority is a minor. Section 3 of the Indian Majority Act, 1875 provides about the age of majority. It states that a person is deemed to have attained the age of majority when he completes the age of 18 years, except in case of a person of whose person or property a guardian has been appointed by the Court in which case the age of majority is 21 years.

Nature of a minor’s agreement
As noted above a minor is not competent to contract. One question which arises in case of an agreement by a minor is, whether the agreement is void or voidable? The Indian contract Act does not have any provision to answer this question. In the absence of any statutory provision there had been controversy on this point. The controversy was set at rest by the decision of the Privy Council, in the case of…...

Similar Documents

Capacity Needs

...1. Explain the challenge Elizabeth faced in meeting her capacity needs and what she should have considered before moving into the larger facility. Capacity is the maximum output rate that a facility achieves. Planning for capacity needs is essential to the successful operation of a facility for a company. Elizabeth faced challenges because there was no capacity planning, which involves the process of establishing the output rate that can be achieved by a facility. (Reid & Sanders, 2010, pg. 316) If there is no careful planning, there may not be enough output capability to meet customer demands or that there could be too much capacity sitting idle. If a company wants to grow and take full advantage of demand, capacity should be carefully planned. (Reid & Sanders, 2010, pg. 317) A lot of capacity planning and demands relies heavily upon customer demand and knowing how to meet those demands. For example There are several needs that are part of capacity planning that Elizabeth should have considered before making the move to a larger facility. The first that should have been determining the market need of the community. Determining the amount of baked goods that would be sold would have helped her understand the space necessary for purchase. After determining the market need, research on the premises, location, prices, and other pertinent information should be obtained to ensure that the proper capacity is used for the physical premises of Biddy’s Bakery.......

Words: 1067 - Pages: 5

Capacity Planning

...Capacity Planning: A Tactical Decision with Strategic Impact   The business environment has never been more challenging than it is right now. The speed of change in the marketplace is creating a stress on corporations to respond quickly and effectively. The foundation that is required to react to dynamic changes in supply and demand is based on understanding your supply chain’s capacities. Understanding and then building the infrastructure that provides the needed flexibility and speed requires an in-depth understanding of how capacity impacts your business.   The impact of capacity management is felt throughout the organization, within every element of the supply chain. Supplier capacity can bring production to a standstill. Production capacity is equally important; if the capacity is not great enough to meet peak demand periods and inventory building is not properly planned, customer demand will go unfilled. Distribution capacity, both storage and throughput, ensures delivery of the right product at the right time. Transportation connects all elements of the supply chain; as such, its capacity issues are key, influencing service levels and on-time delivery performance.   Change has become the rule, not the exception. The need for capacity management is measured not in years or quarters but rather in weeks and months. Changes can be brutally fast and without warning. Industry over the past two years has been hit hard with a steep slowdown of their business. ......

Words: 1968 - Pages: 8

Capacity Planning

...CAPACITY PLANNING Measures of Capacity. No single capacity measure is applicable to all types of situations. Hospitals measure capacity as the number of patients that can be treated per day; a retailer measures capacity as annual sales dollars generated per square foot; an airline measures capacity as available seat-miles (ASMs) per month; a theater measures capacity number of seats; and a job shop measures capacity as number of machine hours. In general, capacity can be expressed in one of two ways: output measures or input measures. Output measures are the usual choice for facilities that produce standard products in high volumes, in a limited number of models using production processes with rigid flow patterns. Nissan Motor Company states capacity at its Tennessee plant to be 450,000 vehicles per year. The plant produces only one type of vehicle, making capacity easy to measure. However, the Navistar plant in Springfield Ohio produces vehicles that range from heavy-duty trucks to school busses. The inherent variation in production time requirements makes a single figure for capacity much less meaningful. Input measures are the usual choice for facilities that produce custom products in low volumes using processes with flexible flow patterns. For example, in a photocopy shop, capacity can be measured in machine hours or number of machines. Demand, which invariably is expressed as output rate, must be converted to an input measure. Only after making......

Words: 3043 - Pages: 13

Capacity Planning

...Submitted to: Dr. Maria Monica Costales University of the Cordilleras, 2nd Trimester SY 2013-14 8 November 2013 Capacity Planning Techniques A. Determining Capacity Requirements In determining capacity requirements, we must address the demands for individual product lines, individual plant capacities, and allocation of production throughout the plant network. Typically this is done according to the following steps: 1. Use forecasting techniques to forecast sales for individual products within each product line. 2. Calculate equipment and labor requirements to meet product line forecasts. 3. Project labor and equipment availabilities over the planning horizon. Often the firm then decides on some capacity cushions that will be maintained between the projected requirements and the actual capacity. A capacity cushion is an amount in excess of the expected demand. Positive Capacity Cushion: If the expected annual demand on a facility is $10 million in products per year and the design capacity is $12 million per year, it has a 20% capacity cushion (2/10). A 20% capacity cushion equates to an 83% utilization rate (100%/120%). Negative Capacity Cushion: when a firm’s design capacity is less than the capacity to meet its demand. If a firm has a demand of $12million in product per year but can only produce $10million per year, it has a negative capacity cushion of 20 %. Problem 1.Amiel’sCompany produces two flavors of salad dressings: Ranch and Ceasars.......

Words: 1219 - Pages: 5

Capacity

...Capacity- The upper limit on the load that an operating unit can handle Design capacity- Maximum output rate of service capacity an operation, process, or facility is designed for. Effective Capacity-Design capacity minus allowances such as personal time and maintenance. Efficiency-Actual output / Effective capacity X 100% Utilization- Actual output / Design capacity X 100% Factors Facilities 1.Design 2.Location 3.Layout 4. Environment Product/Service 1.Design 2.Product or service mix Process 1.Quantity capabilities 2.Quality capabilities Human Factors 1.Job Content 2.Job Design 3.Training and experience 4.Motivation 5.Compensation 6.Learning Rates 7. Absenteeism and labor turnover Policy Operational 1.Scheduling 2.Materials Management 3.Quality Assurance 4.Maintenance Policies 5.Equipment Breakdowns Supply Chain External Factors 1.Product standards 2.Safety regulations 3.Unions 4.Pollution control standards Capacity Cushion- Which is an amount of capacity in excess of expected demand when there is some uncertainty about demand Economies of Scale-If the output rate is less than the optimal level, increasing output decreases unit cost Diseconomies of Scale- If output is increased beyond optimal level avg unit costs would become larger. Present Value- Expresses in current value the sum of all future cash flows of an investment proposal Cash Flow-The diff between cash received from sales and other sources and cash outflow for labor,......

Words: 1450 - Pages: 6

Capacity Planning

...CAPACITY PLANNING BECK MANUFACTURING AND PLANT CAPACITY BUS644: OPERATIONS MANAGEMENT KIMBERLY JOHNSON ASHFORD UNIVERSITY MICHAEL SNELL FEBRUARY 3, 2014 Capacity planning is a process used to determine production capacity needed by the organization to meet demands for its products. Capacity can be defined as the measurement of the organization’s ability to provide the demand for services or goods requested in a timely manner. Capacity may also be defined as the maximum rate of production. The decisions of management can affect capacity. Most decisions that affect capacity are increases in time and the quality of preventive maintenance which may increase capacity by reducing unexpected equipment failure and changing production rate. Capacity decisions are critical to the organization’s success because they allocate significant resources to assets that usually cannot be changed easily or economically. Capacity decision is based on the best estimate of the future and should be made so that as much flexibility as possible can be retained. If capacity is not obtain in the proper amount, too much capacity can mean that the organization invested in resources where not needed but if capacity is too small, potential sales and market share are lost. Capacity is the maximum amount of work that the organization is capable of completing in any given period. Effective capacity is the maximum amount of work the organization is capable of completing in a period...

Words: 733 - Pages: 3

Capacity Management

...2. Flow rate or capacity of each resource. a. Receptionist: capacity = (1 patient / 3 min) (60 min/hr) = 20 patients / hr b. Changing Rooms: Each patient requires 5 min in step 2 as well as 5 minutes in step 6 for a total of ten minutes. capacity = (1 patient / 10 min) (60 min/hr) (3 changing rooms) = 18 patients / hr c. Nurse 1: capacity = (1 patient / 6min) (60 min / hr) = 10 patients / hr d. Nurse 2: capacity = [1 patient / (3 + 1 min)] (60 min / hr) = 15 patients /hr e. Nurse 3 / MRI Machine: capacity = (1 patient / 10 min) (60 min / hr) = 6 patients / hr 3. Bottleneck is Nurse 3/MRI Machine because that resource’s capacity is least. The process capacity is the bottleneck because the maximum number of patients this setup can handle is 6 patients per hour, no more. 4. The best case lead time for one patient without delays is 33 minutes, calculated by the time it takes without delays to go through all six steps- 3 min (step1) + 5 min (step2) + 6 min (step3) + 4 min (step 4) + 10 min (step 5) + 5 min (step 6) = 33 minutes. 5. If a patient could start at step 6 to begin the day, the bottleneck of 6 patients per hour should be multiplied by 12 hours to determine that 72 patients should be scheduled in a day. However, with a patient required to begin at step 1 at 8am, patient #1 does not reach step 5 (the bottleneck of 10 min) till 8:19am. Therefore, from 8:19 am to 7:49pm, Nurse 3 / MRI......

Words: 534 - Pages: 3

Excess Capacity

...Discussion Issues and Derivations What is the cost of using excess capacity? Firms often use the excess capacity that they have on an existing plant, storage facility or computer resource for a new project. When they do so, they make one of two assumptions: 1. They assume that excess capacity is free, since it is not being used currently and cannot be sold off or rented, in most cases. 2. They allocate a portion of the book value of the plant or resource to the project. Thus, if the plant has a book value of $ 100 million and the new project uses 40% of it, $ 40 million will be allocated to the project. We will argue that neither of these approaches considers the opportunity cost of using excess capacity, since the opportunity cost comes usually comes from costs that the firm will face in the future as a consequence of using up excess capacity today. By using up excess capacity on a new project, the firm will run out of capacity sooner than it would if it did not take the project. When it does run out of capacity, it has to take one of two paths: &Mac183; New capacity will have to be bought or built when capacity runs out, in which case the opportunity cost will be the higher cost in present value terms of doing this earlier rather than later. &Mac183; Production will have to be cut back on one of the product lines, leading to a loss in cash flows that would have been generated by the lost sales. Again, this choice is not random, since the logical action to take is the one......

Words: 1473 - Pages: 6

Capacity Building

...Prepare and present a 5 minute (3 pages) presentation on one strategy for poverty eradication, wealth creation and development. Strategy-Capacity Building Introduction Rural-urban migration, population mobility and sex work continue to drive sexually transmitted epidemic in Sex workers. Capacity building can be channeled through state level partners such as sex workers association or community based organizations in given towns to help organize outreach, community mobilization and dedicate clinics for sex workers. Sex workers should be enlightened through services such as Condom promotion, syndromic case management, regular checkups and treatment of asymptomatic infections. The capacity building strategy aims at training the sex workers, monitor outcomes and conduct research on the wellbeing of the sex workers. The capacity building inputs directed to the sex workers may also be offer simple rate loans to assist begin income generating activities. In addition, sex workers may be capacity build through assisting them form wealth creation groups-forming chamas, and begin saving. The capacity building coordinators will help the workers in opening group bank accounts and conducting rotation loan allocation. Loans will boost economic status of the workers reducing their participation in the sex workers career. Conclusion In conclusion, Capacity building may offer training of skills such as Mat making, waste recycling. The skills and techniques instilled in the sex workers will......

Words: 261 - Pages: 2

Capacity

...Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its product. In the context of capacity planning, design capacity is the maximum amount of work that an organization is capable of completing in a given period. Effective capacity is the maximum amount of work that an organization is capable of completing in a given period due to constraints such as quality problems, delays, material handling, etc. The phrase is also used in business computing as a synonym for capacity management. There are four procedures for capacity planning; capacity planning using overall factors (CPOF) capacity bills, resource profiles, and capacity requirements planning (CRP). The first three are rough-cut approaches (involving analysis to identify potential bottlenecks) that can be used with or without manufacturing resource planning (MRP) systems. CRP is used in conjunction with MRP systems. Capacity using overall factors is a simple, manual approach to capacity planning that is based on the master production schedule and production standards that convert required units of finished goods into historical loads on each work center. Bills of capacity is a procedure based on the MPS. Instead of using historical ratios, however, it utilizes the bills of material and routing sheet (which shows the sequence or work centers required to manufacture the part, as well as the setup and run time). Capacity requirements can then be......

Words: 456 - Pages: 2

Legality & Capacity

...Chapter 12: Capacity and Legality (Only pages 221-228 On Legality) Legality (221) • One requirement to have an enforceable contract is that the object of the contract must be lawful. Most contracts that individuals and businesses enter into are lawful contracts that are enforceable. • These include contracts for the sale of leases; licenses; and other contracts. • Some contracts have illegal objects. That such contract is VOID and therefor unenforceable. These are called Illegal contracts. Contracts Contrary to statutes • Federal and State legislatures have enacted statutes that prohibit certain types of conduct. Contracts to perform activities that are prohibited by statute are illegal contracts. • Ex. An agreement between two companies to engage in price fixing in violation of federal antitrust statutes is illegal and therefore void. Thus, neither company to this illegal contract can enforce the contract against the other company. Usury Laws • State usury laws – set an upper limit on the annual interest rate that can be charged on certain types of loans. • Vary from state to state, Lenders who charge a higher rate that the state limit is guilty of usury. • Laws intended to protect unsophisticated borrowers from loan sharks and others who charge exorbitant rates of interest. • Most states have criminal and civil penalties for making usurious loans. o Some states make lenders remit the difference between the interest rate charged on the loan and the......

Words: 1934 - Pages: 8

Capacity

...food and shelter then there would have been legal ground to stand on. 13-3 - Capacity A widowed seventy-five-year-old woman named Joanne survives on a fixed budget and has recently become forgetful. Her family fears she has Alzheimer’s but no doctor has diagnosed her with this illness and no court has ruled on her legal competence. Joanne goes to a piano store one day and purchases a piano on installment. The next day when it is delivered, she tells the delivery person she has no recollection of making such a purchase. Is this contract void, voidable, or valid? A contract will be void “if a court has previously determined that a person is mentally incompetent and has appointed a guardian to represent the individual” (Clarkson, Miller, & Cross, 2012, p. 239), therefore any contact that person enters into is void – meaning it does not exist. If a court has not determined that a person is mentally incompetent “but in fact the person was incompetent at the time the contract was formed, the contract may be voidable.” This occurs when the person either did not know they were in fact entering into a contract agreement or they lacked the mental capacity to understand the “nature, purpose, and consequences.” (Clarkson, Miller, & Cross, 2012, p. 240) A contract may be valid if entered into by a person who is mentally incompetent without ruling of their competence by a court, but who had “capacity at the time the contract was formed.” (Clarkson, Miller, & Cross,......

Words: 1899 - Pages: 8

Capacity Building vs Capacity Development

...Capacity Building Versus Capacity Development in Healthcare Soumya Vyas Student, Institute of Health Management Research, Jaipur, India Capacity building is not a new concept in healthcare. Every innovation has been evidently supported by Capacity Building to establish effective healthcare systems. The term was improvised by UNDP in 1991 as Community Capacity Building which gave its application in three levels namely individual, institutional and societal. This concept immediately brings to mind ideas like training, financial or technical aid, etc. Although it has been an essential and effective approach, there is possible scope for betterment using Capacity Development. It can be explained as the process of obtaining, strengthening and maintaining the capabilities at all the three levels to set and achieve their own development objectives over time. Although the distinction between the two is minute, the adaption of the latter where necessary can bring about considerable change and effect. Development zooms in on the exiting features than can be transformed into capabilities. Instead of introduction of the lacking, capacity development helps realise an alternate route to the same objective using unrelated but pre-existing features. The study will elaborate on the example of such from the healthcare field explaining how new measures can be evolved to realise basic goals. One of the most profound issues in healthcare in India is the budget crunch and Capacity Development......

Words: 276 - Pages: 2

Capacity

...Deadline: 19th November 2015 Clever Unisex Wear Ltd Background of the Organization: Clever unisex wear is a shop in Aradippou, Larnaca and it was established on the 02nd of September 2013. Is a very popular shop in Larnaca due to the good advertisement that they do and also by sponsoring some events such as cultural and philanthropic. They also organized a fashion show with some famous actors and actress. During the fashion shows they offered 50 and 60 % discount .Due to the discount offered the sales have been increased. Moreover they tried to satisfy their customers by selling good quality product in affordable prices and they also tried to avoid the mistakes that other shop owners used to do. In order to achieve an effective capacity they use the SWOT analysis method. The SWOT analysis of a company is about the Strengths, Opportunities, Weaknesses, and Threats of the company. What they try to do is actually to increase their strengths (for example makes more events) and find where is their opportunity to growth (for example if they are in the perfect place). What is more, they try to find their threats (for example threat from another shop near to them) and decreased their weaknesses. Demand Definition: Demand of a product is when we want a product and we can afford it and also we plan to buy it. (Parkin, Powell and Matthews, 6th edition).The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a......

Words: 1262 - Pages: 6

Organisational Legitimacy, Capacity and Capacity Development

...Reflection Organisational legitimacy, capacity and capacity development Mobilising against hunger and for life: An analysis of Derick W. Brinkerhoff capacity and change in a Brazilian network John Saxby Pretoria, South Africa Discussion paper No 58A June 2005 European Centre for Development Policy Management Centre européen de gestion des politiques de développement Study of Capacity, Change and Performance Notes on the methodology The lack of capacity in low-income countries is one of the main constraints to achieving the Millennium Development Goals. Even practitioners confess to having only a limited understanding of how capacity actually develops. In 2002, the chair of Govnet, the Network on Governance and Capacity Development of the OECD, asked the European Centre for Development Policy Management (ECDPM) in Maastricht, the Netherlands to undertake a study of how organisations and systems, mainly in developing countries, have succeeded in building their capacity and improving performance. The resulting study focuses on the endogenous process of capacity development - the process of change from the perspective of those undergoing the change. The study examines the factors that encourage it, how it differs from one context to another, and why efforts to develop capacity have been more successful in some contexts than in others. The study consists of about 20 field cases carried out according to a methodological framework with seven components, as......

Words: 10927 - Pages: 44