Measuring Capacity

Question 1

Capacity utilisation define

Answer 1

The proportion of a firms capacity that is actually being used over a specific period

Question 2

Capacity utilisation formula

Answer 2

(Actual output / design capacity ) x 100

Question 3

Example of calculating capacity utilisation

Car manufacturing a is capable of producing 500,000 cars per year.

Last year the actual output was 340,000 cars

What’s the capacity utilisation?

Answer 3

Formula = actual output / design capacity

340,000 cars = actual output

500,000 cars = design capacity

340,000/500,000 = 68%

Question 4

What was the % reduction in capacity going to an all seater?

26888 attendance at the game (seating)

43,984 is record overall a standing

27,137 is all seater max

Answer 4

27137/43984 = 61,2%

Question 5

What was % capacity utilisation of stadium

26,888 attendance

Holds 27137

Answer 5

26888/27137= 99%

Question 6

If you had to assess different companies

Answer 6

Use the sandcone theory of judging quality first and so on…

Question 7

Time takes to be produced
X=1.5 weeks
Y= 1 weeks
Z= 0.75

Calculate time needed to produce these variants if demand for X,Y and Z if ratio is of 2:3:2?

Answer 7

The time needed to produce (2+3+2) 7 variants is:

X = 2 x 1.5 weeks = 3 weeks
Y = 3 x 1 weeks = 3 weeks
Z= 2 x 0.75 = 1.5 weeks

= 7.5 weeks

Question 8

Time taken to produce:
X= 1.5 weeks
Y= 1 weeks
Z= 0.75 weeks

Calculate time needed to produce these variants if demand for X,Y and Z is ratio of 1:2:4?

Answer 8

Time taken to produce these variants (1+2+4) 7 variants is:

X= 1 x 1.5 weeks = 1.5 weeks
Y = 2 x 1 weeks = 2 weeks
Z 4 x 0.75 weeks = 3 weeks

= 6.5 weeks

Question 9

Calculate how many units are produced in the 1st ratio (2:3:2) with x=1.5 weeks, y= 1 week and z = 0.75 weeks, of the production time available is 800 weeks using multiple production lines?

Answer 9

Answer = 800 weeks over the 7.5 weeks worked out via question before

800/7.5 = 106.66 units

Question 10

Calculate how many units are produced in the 2nd ratio (1:2:4), if the production time available is 800 weeks using multiple production lines?

Answer 10

800 weeks / 6.5 weeks(using 2nd part answer)

= 123.07 units

Question 11

Calculate the % increase in capacity you achieve in going from a ratio of 2:3:2 to 1:2:4?

Answer 11

123. 07 units (2nd answer) - 106.66 units (1st answer) = 16.41 extra units
124. 41 / 106.66 (the unit figure for the amount of units on 2:3:2 ratio)

= 15.38%