Capacity Utilization

Categories: Economics, Operation and Production,

a measure of the plant and equipment of a company or an industry that is actually being used to produce goods or services. Capacity utilization is usually measured over a specific period of time, for example, the average for a month, or at a given point in time. It can be expressed as a ratio, where utilization = actual output divided by design capacity. This measure is used in both capacity planning and capacity requirements planning processes. the output of an economy, firm, or plant divided by its output when working at full capacity