indivisibilitiesthe physical inability, or economic inappropriateness, of running a machine or some other piece of equipment at below its optimal operational capacity. For example, because of design and technical specifications a machine may optimally carry out 4,000 operations per day, it being physically impossible to build two ‘half-machines’ in its stead, each performing only 2,000 operations. Given this situation, a firm requiring, say, a machine which carried out 3,000 operations per day would be forced to invest in the minimum-sized machine of 4,000 operations per day capacity. As a result the machine would be under-utilized and the unit of AVERAGE COST would be greater than if the machine were optimally employed.
Indivisibilities may pose particular problems in the context of a PRODUCTION-LINE operation where a number of processes and machines, each having different optimal capacities, may be required. Suppose a firm needs to combine process A machines capable of carrying out 5,000 operations per day and process B machines capable of carrying out 2,000 operations per day. Only by producing 10,000 units a day, employing two process A machines and five process B machines, would the firm be able to use both types of machine in a cost-effective way. Any output level below this would result in either one or other machine, or both, being under-utilized. See MACHINE UTILIZATION, PRODUCTION-LINE BALANCING.