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Capacity

Credit grantors' measurement of a person's ability to repay loans.

Capacity

The theoretical maximum number of products a company can produce at a given time. For example, an oil pump may have a capacity of X barrels per day, meaning that it cannot produce more than X. Companies rarely operate at full capacity, both to allow themselves leeway in the event of increased demand and because capacity may not be possible at a given time because of worker illness, machinery maintenance, or other reasons.

capacity

the maximum amount of output that a firm is physically capable of producing, at a point in time, given the fullest and most efficient use of its existing plant or plants.

Over time, a firm may adjust its capacity to meet changes in demand and the competitive situation facing it, investing in new plant or extending existing plant to meet an increase in demand, or closing down plant, permanently or temporarily (‘MOTHBALLING’), to meet a situation of OVERCAPACITY.

When preparing a PRODUCTION BUDGET, it is necessary to ensure that the firm has sufficient production capacity to meet planned output levels. A firm's capacity or the capacity of industry in general may be limited by the availability of capital equipment and labour.

The maximum rate of output which the firm can produce will depend upon the capacity of its individual factories which in turn depends upon the capacity of various departments and work stations within each factory See INPUT-OUTPUT CONTROL, PRODUCTION SCHEDULING, PRODUCTION-LINE BALANCING. See CAPACITY UTILIZATION, LIMITING FACTOR, RATIONALIZATION, INDIVISIBILITIES, CAPACITY CONSTRAINED RESOURCE, CAPACITY CONTROL, CAPACITY CUSHION, CAPACITY PLANNING, CAPACITY REQUIREMENTS PLANNING.

capacity

  1. 1the maximum amount of output that a firm or industry is physically capable of producing given the fullest and most efficient use of its existing plant. In microeconomic theory, the concept of full capacity is specifically related to the cost structures of firms and industries. Industry output is maximized (i.e. full capacity is attained) when all firms produce at the minimum point on their long-run average total cost curves (see PERFECT COMPETITION). If firms fail to produce at this point, then the result is EXCESS CAPACITY.
  2. in macroeconomics, capacity refers to POTENTIAL GROSS NATIONAL PRODUCT. The percentage relationship of actual output in the economy to capacity (i.e. potential national income) shows capacity utilization. See also MONOPOLISTIC COMPETITION.

capacity

The legal ability of parties to enter into contracts.
• Full capacity. Having unlimited ability to enter into binding contracts of all types.
• Limited capacity. Having the ability to enter into binding contracts for certain things, such as a minor's contracts for necessities, but also having the ability to disaffirm other contracts upon reaching legal age, for example.
• No capacity. Having no ability to enter into contracts, such as one who has been adjudicat- ed as mentally incompetent.

References in periodicals archive ?
Table 50: Announced Yearly Boiler Manufacturing Capacities
Standard features: Benchtop model requires only air supply and 115 v current for use and has interchangeable heating cylinder sizes and various shot capacities.
Most types of media cartridges are available in a variety of capacities and tape lengths and are widely distributed.
If you want long-term research collaborations as a basis for building research capacities, you have to start at the ground level of building researcher-to-researcher connections," says Damstra.
The president of an automobile company may see the capacity of the company as less than the sum of the capacities of all the establishments within the company because shortages of key components, such as engines or automatic transmissions, may limit total production.
In this way the real European capacity numbers have been revealed, and key large companies who exaggerate their capacities can now be correctly compared with others.
To reach native terabyte-class tape cartridge capacities and beyond, Maxell has developed Neo Super Maximum-capacity Advanced Reliability Tape (NeoSMART)--a collection of advanced technologies and production methodologies designed to support native capacities of up to 10TB per cartridge and beyond.
Market Survey of European Solar Cell and Solar Panel Manufacturers includes key market trends in sales (2002-2006) and capacities (2002-2007) and individual profiles on the companies.
Information on refining, FCC, hydrocracking and coking capacities by refinery and country
The question of how long capacities can increase without corresponding increases in performance leads to a discussion of just exactly what are the real limits of storage.
Customers can purchase the VXA-172 Packet Drive today and easily upgrade to larger capacities tomorrow.