Capacity Utilisation Flashcards
1
Q
Capacity utilisation =
A
Actual level of output divided by maximum possible output x 100
2
Q
Capacity utilisation
A
The % of totals capacity that is acc being achieved using a given period.
3
Q
Capacity management
A
Th process used to ensure the capacity is capable of meeting current and future business needs in a cost effective fashion.
4
Q
Reaching full capacity
A
Advantages: Inc amount of land Profits will inc Employees may be more motivated Opportunities for bonus payments Stakeholders will see the business in a favourable light Inc efficiency of machines Benefit from ECONs
Disadvantages: Downtime Orders will be near impossible to meet and will be costs in additional time Quality levels will be affected Pressure on employees Little/no opportunity for maintenance
5
Q
Constraints on meeting full capacity
A
Competing for a limited number of customers
Product is declining
Seasonal products have periods of little/no demand
Alternatives
Inc capacity and outsourcing will make it difficult
