capacity management Flashcards
1
Q
what does capacity mean
A
- measure of how much output it can achieve in a given period
2
Q
what does capacity utilisation mean
A
- percentage of a businesses capacity thats actually being used over specific period
3
Q
capacity utilisation formula
A
actual level of output / maximum possible output x 100
4
Q
why does capacity utilisation matter
A
- measures productive efficiency , measures whether there’s unused resources in business
5
Q
3 key costs of capacity
A
- equipment
- faciitlies
- labour
6
Q
problems working at high capacity
A
- negative effect on quality ( rushed , less time for quality control)
- employees suffer
- loss of sales ( less able to meet sudden demand )
7
Q
summary on capacity
A
- high cap= better than low
- flexibility of capacity is needed, ability to meet changes in demand
