Capacity is the maximum rate of output for a particular operations or
thinks. The manager should have an idea regarding the capacity to meet the
current & future demand of the product.
(1)Peak capacity: It
is the maximum rate of output that an organization can achieve under an ideal
or a favourable condition
(2)Effective capacity:
It is the maximum output rate that an organization economically sustained under
a normal condition
(3)Rated capacity:
Rated capacity is the capacity which is assessed by the engineer or The
capacity which is mentioned in the body of the machine. It's an engineering
assessment.
(4)Utilization rate: It
is the degree to which 5M are currently being used to fulfil the maximum
capacity
(5)Capacity cushion:
The amount of reserve capacity of a particular organization.
(6)Capacity gap: Any
differences between projected/calculated and current capacity. It can be positive
or negative
(7)Economies of scale:
It is the concept that describes the average cost per unit can be reduced by
increasing the output rate.
(8)Diseconomies of scale:
It is the concept that the average cost per unit can be increased if the output
rate is being increased.
