capacity

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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 ?
5) and as for functional capacity, the difference between the water and baseline treatments was likely due to the 21 -day incubation at 25[degrees]C on the water treatment.
In this context, the results of this study reveal an incidence of a 15.3% decline in functional capacity in community-dwelling elderly between 2011 and 2014.
Institutionalized elderly present higher rates of fragility, which is predictive to the loss of functional capacity, than community-dwelling elderly.
Table 2 shows the comparison of the functional capacity and postcardiorespiratory responses of bronchiectasis and healthy subjects in the Glittre ADL test and six-minute walk test.
The CPET showed that all patients had reduced functional capacity and exercise intolerance as expected with a low V[O.sub.2] peak.
Functional capacity evaluations have been criticized due to the lack of standardization in terminology, test length, evaluator qualifications, report format, and determination of material handling and problems with predictive validity of FCE for outcomes (Streibelt, Blume, Thren, Reneman, & Mueller-Fahmow, 2009).
New York Heart Association (NYHA) functional capacity was level II in 9 patients and level III in 13 patients.
Scoring 48 points signifies full functional capacity, whereas scoring 12 points indicates that the patient has considerable functional deficit.
The patients were evaluated by means of pain and functional capacity. Functional capacity was assessed by 100-meter walking test, time to ascend and descend stairs (12 stairs), sit-to-stand chair rises and the Western Ontario McMaster University Osteoarthritis (WOMAC) functional and global index (19-21).
Knowing the effects of aquatic exercises in thermal water on the functional capacity of individuals diagnosed with knee osteoarthritis
Tai chi training appears to reduce balance impairments in patients with mildto-moderate Parkinson's disease, with additional benefits of improved functional capacity and reduced falls.

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