Topic Seven, Part 1 - Capacity Utilisation and Management Flashcards
1
Q
What resource usage is Managing capacity concerned with in the business?
A
- Factory space
- Amount of raw materials
- Available labour
2
Q
How does a business manage capacity?
A
- Analyse the effect of new products on capacity
- Monitoring IT servers capacity
3
Q
How do you Calculate Capacity Utilisation?
A
Fixed costs / % of maximum capacity utilisation
4
Q
What ways can a business reach full capacity?
A
- adverts to increase demand
- Produce other goods with the same resources to increase output
5
Q
What are the Benefits of operating at full capacity?
A
- Fixed costs spread over more products
- Less resource wastage
- Business looks better to stakeholders
6
Q
What are the Drawbacks of operating at full capacity?
A
- Cannot fulfil additional orders
- more stress on employees
- Quantity may be chosen over quality
7
Q
What are the Constraints on reaching full capacity?
A
- Competition will limit the businesses customers
- Fall in demand
