Production capacity
Capacity or production is measured by indicators such as production, productivity, capacity utilization, efficiency or effectiveness.
Performance of the production process, is the amount of the product which the company can produce in a given time. The company may use estimates of demand for certain good in order to establish the necessary production capacity, however, the amount of manufactured products during can significantly deviate from the planned amount of production. This depends on the disturbance of the process, quality level, efficiency of equipment, and many other factors related to the manufacturing process. Productivity is the volume of production in relation to the quantity of resources consumed.
Production capacity refers to the maximum amount of goods or services that a production system can produce within a given period of time. It is often measured in terms of output per unit of time, such as units per hour, units per day, or units per month. Production capacity can be influenced by a variety of factors, including:
- Equipment and machinery: The type, condition, and capacity of the equipment and machinery used in the production process can affect the overall production capacity.
- Labor: The number and skill level of the workers involved in the production process can affect the overall production capacity.
- Materials and supplies: The availability and quality of the materials and supplies used in the production process can affect the overall production capacity.
- Production process: The efficiency and effectiveness of the production process, including the design of the production line, can affect the overall production capacity.
- Maintenance: The maintenance schedule and effectiveness of maintenance can affect the overall production capacity.
- Market demand: The level of market demand for the goods or services being produced can affect the overall production capacity.
- Government regulations: Compliance with government regulations such as safety, environment, labor laws, and taxes can affect the overall production capacity.
Production capacity can be increased by investing in new equipment and machinery, hiring more workers, improving the efficiency and effectiveness of the production process, and increasing market demand. The production capacity can be measured by using performance indicators such as capacity utilization rate, production yield, and efficiency.
See also:
| Production capacity — recommended articles |
| Readiness of production facilities — Production reserve — Factor of production — Factors affecting supply — Uniformity of production — Change In Supply — Optimization of the production run-length — Cost of production — Manufacturing cost |
References
- Kleindorfer, P. R., Singhal, K., & Wassenhove, L. N. (2005). Sustainable operations management. Production and operations management, 14(4), 482-492.
