Production capacity

Production capacity
See also
Uniformity of production Operational effectiveness Optimum size of the order Scrap rate Factor of production Two-tier inventory control Economic batch size Factors affecting supply Dependent demand

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.

One of the key measures of business performance is production capacity.

It indicates maximum quantity of product that may be produced in the specified time.

See also:

• Fixed cost

References

• Kleindorfer, P. R., Singhal, K., & Wassenhove, L. N. (2005). Sustainable operations management. Production and operations management, 14(4), 482-492.