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level: Production capacity

Questions and Answers List

level questions: Production capacity

QuestionAnswer
Production capacityThe maximum rate of output that a production facility is able to produce under a given set of operating conditions. In the context of a plant or factory, this is dubbed plant capacity
Assumed operating conditions- Number of shifts per day - Of hours per shift - Employment levels
Plant Capacity eqsee image
adjusting plant capacity short term- Change number of workers - Change number of shifts per week - Change hours per shift e.g. overtime
adjusting plant capacity intermediate and long terms- Change number of machines - Change processing technology
Costs of manufacturing operationsFixed costs - Building, equipment, insurance, rates Variable costs - Direct labour, raw materials, power