Capacity management Flashcards
1
Q
Capacity
A
measures how much output can be achieved
2
Q
Capacity utilisation
A
proportion of a business capacity that is being used over some time.
3
Q
Capacity utilisation formula
A
Actual level of output / Maximum possible output x100
4
Q
Why do business operate below capacity (100%) ?
A
- lower than expected demand
- seasonal variations in demand
- maintaince and repair
5
Q
Dangers of operating in low capacity utilisation
A
-Higher unit costs
- Less likely to reach breakeven output
6
Q
Problems working at high capacity
A
-Negative effect of quality - production rushed
- Employees suffer - demotivated workload added
7
Q
Can bus work in more than 100% capacity utilisation?
A
-Short term possibility
- Increase workforce hours
- Reduce time spent on maintenance
8
Q
Improve capacity utilisation
A
- outsourcing
- increase sales
- reduce capacity
- redevelopment
