Idle Capacity

Idle Capacity

The capacity of a company not currently being used. One calculates idle capacity thusly:

Idle capacity = Capacity / Utilization * 100%

Because idle capacity usually has costs associated with it, companies attempt not to have idle capacity unless the cost of waste (such as unsold products) exceeds the cost of idle capacity.
References in periodicals archive ?
Unlike previous research, this paper develops a generic model that measures planned and unplanned idle capacity to provide direct patient care, after adjusting for the imperative to treat emergency cases.
Al-Fateh Abbas Al-Qurashi said in a working paper he presented to the workshop that the Five-Year Programme aimed at cultivation of 500,000 acres with cotton as part of eight export commodities, unveiling the plan to mobilize the idle capacity to reach 17,000 tons basing on modern technology, pointing out to the importance of stable agricultural policies to recover the national economy, stressing importance of giving concern to the agriculture- based industry to benefit from the competitive advantages in this regard.
State of the art machinery with plenty of idle capacity to grow.
In order to boost up exports of the country, the government should speed up its efforts to revive the idle capacity of textile sector, they demanded.
But limited by market demand, the annual output of most vendors was below their designed annual capacity with a high idle capacity rate.
The cost of building the ships is funded from money that would have been used to pay for idle capacity, finance redundancies and meet the cost of industrial restructuring.
It would also help ignite an idle capacity of 1000 megawatt that would ultimately be available for consumption in the country.
Ahmed Mukhtar, Minister for Water and Power in the chair to implement the decision of the Council of Common Interest (CCI) regarding utilization of idle capacity of KESC and to reduce 350 MW from KESC.
FPI executives said immense orders from Unity and backlight module maker Luemns of South Korea have left their company's production lines no idle capacity.
43, Chapter 4," Sid Ewer, Craig Keller, and Stevan Olson argued in a 2010 Strategic Finance article that more firms should be recognizing a line-item expense for the cost of abnormal idle capacity.
Opec has idle capacity of less than 2 million barrels a day, down from 3 million in December, the bank said.
While the relatively good numbers expected are important for the stock, the most crucial announcement is likely to be news of a relaunch of Raspadskaya mine that is expected to happen in the coming days, and also a timeframe for when the remaining 50% of idle capacity will come online.