KT16: 2.4.2 capacity utilisation

Question 1

downtime

Answer 1

any period when machinery is not being used in production; some downtime is necessary for maintenance, but too much may suggest incompetence

Question 2

Excess capacity

Answer 2

when there is more capacity than justified by current demand

Question 3

Rationalisation

Answer 3

reorganising in order to increase efficiency. this often implies cutting capacity to increase the percentage utilisation

Question 4

subcontracting

Answer 4

when another business is used to perform or supply certain aspects of a firm’s operations