Theme 2 Capacity Utilisation

Question 1

Capacity Utilisation Formula

Answer 1

Current Output/
Max possible Output
X 100

Question 2

What does Capacity depend on ?

Answer 2

NO. of employees
Tech the business has
Production Process
Investment into the business

Question 3

Over Utilisation + and -

Answer 3

+ Can buy more machines, increase productivity
+ Increase staff in the long run

• No room for error/downtime
• Cant increase output for seasonal demand