capacity utilization

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Capacity Utilization Rate

The extent to which a company uses its facilities at capacity, expressed as a percentage. That is, the capacity utilization rate states how much a company produces as a percentage of what it can produce. For example, if a factory produces 1,000 widgets per day but could produce 2,000 for the same cost, it has a capacity utilization rate of 50%. The capacity utilization rate is most useful for companies producing goods rather than services because goods are simply easier to quantify.

capacity utilization

the proportion of a firm's available CAPACITY which is currently being employed in producing output. This depends to a great extent on the state of demand and a firm's competitive abilities. A fall in demand, or a failure to win orders against competition, may force a firm to operate at below BREAK-EVEN levels of capacity utilization. See INDIVISIBILITIES, BUSINESS CYCLE, MACHINE UTILIZATION.
References in periodicals archive ?
Increase in investments and capacity utilisation rate
On our estimates, Uralkali's capacity utilisation rate will reach only 45% in 1Q13 vs 70% in 1Q12.
In October 2011, the capacity utilisation rate in manufacturing was 79.
In September, the capacity utilisation rate in manufacturing was 82.
Turkey's statistics authority-Turkstat announced earlier on Monday that he capacity utilisation rate in Turkish manufacturing industry rose 9.
The firm aims to increase its capacity utilisation rate in production to 70 percent in 2010.
According to Eurostat's forward-looking indicator for the fourth quarter of 2010, the capacity utilisation rate ticked up to 82.
The capacity utilisation rate improved for the third consecutive quarter.
In May, the capacity utilisation rate in manufacturing was 85.
Although the upstream process capacity utilisation rate at the works is now only 60%, it would rise to 100% if the agreement with China Steel is consummated.
In July 2011, the capacity utilisation rate in manufacturing was 70.
In April, capacity utilisation rate in manufacturing was 80.