Asked by Shatha Zaghloul on Jul 14, 2024
Verified
A factory outputs 1000 units a month. If design capacity is 3000 and efficiency is 50% find utilization and effective capacity.
Effective Capacity
The maximum output a system is capable of achieving under normal operating conditions, taking into account potential constraints.
Utilization
Refers to the extent to which a system, resource, or workforce is used to achieve its maximum potential output or capacity.
- Measure and clarify the utilization and productivity within business functions.
- Assess the real and schematic capacity of operational activities.
Verified Answer
BT
Bernie TambergJul 15, 2024
Final Answer :
Output = Utilization ∗ Design Capacity gives 1000 = utilization ∗ 3000, utilization = 33.33%. Next use output = efficiency ∗ effective capacity to get 1000 = .5(effective capacity), effective capacity = 2000 units.
Learning Objectives
- Measure and clarify the utilization and productivity within business functions.
- Assess the real and schematic capacity of operational activities.
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