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 79.7%, or 3.5 percentage points higher than a year earlier.
Turkey's statistics authority-Turkstat announced earlier on Monday that he capacity utilisation rate in Turkish manufacturing industry rose 9.2% year-on-year and 1.2% month-on-month in May and reached 73.4%.
The firm aims to increase its capacity utilisation rate in production to 70 percent in 2010.
Germany and the United Kingdom, both with two-point increases, were the most significant contributors to the evolution of the industrial confidence indicator that rose one point in the Euro zone and two points in the EU as a whole.The capacity utilisation rate rose by 1% across the EU in January, partly due to the figures reported by the United Kingdom, where capacity utilisation shot up to 82% from 80.3% in the last quarter of 1999.
The capacity utilisation rate improved for the third consecutive quarter.
In September, the capacity utilisation rate in manufacturing was 82.7%, or 5.4 percentage points higher than a year earlier.
In July 2011, the capacity utilisation rate in manufacturing was 70.4%, or 0.6 percentage points higher than a year earlier.
In May, the capacity utilisation rate in manufacturing was 85.2%, or 10.8 percentage points higher than a year earlier.
ANKARA, May 24, 2010 (TUR) -- The capacity utilisation rate in Turkish manufacturing industry has been 73.4% in May.
In April, capacity utilisation rate in manufacturing was 80.7%, or 9.2 percentage points higher than a year earlier.