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 ?
This would leave the current Riverbank site vacant for pupils from St Peter's RC School, which is currently over-capacity, to move in.
The most likely cause is a continued over-capacity in trucking.
The latter option would mean that Strathburn would be over-capacity by 11 pupils by 2022, and an extension may be required.
Gibson says that there is a human cost to the over-capacity of steel.
Freight forwarders, on which container shipping companies depend, "make good use of the over-capacity, existing in all container line,s and succeed to negotiate the seafreight down to ridiculous and unsustainable low levels".
The lower prices, reduced demand and industry over-capacity have significantly affected profitability and cash flow health of not only smaller-scale companies like Shanxi Huayu, but also major coal enterprises such as Yanzhou Coal Mining Company Limited (Yancoal, B/Negative) and China Shenhua Energy Company Limited (Shenhua, A+/Stable).
After talks in Brussels, he said: "They have absolutely recognised it is a problem of over-capacity in their country." But there would be no "overnight solution".
PHILIP HAMMOND has travelled to Beijing to meet his Chinese counterpart and raise the issue of over-capacity in steel production.
Commerce department brass on Wednesday discussed a plan to put in place a minimum import price to prevent shipments of cheap steel products entering the country from China and other countries which are grappling with severe over-capacity. The proposal has been moved by domestic steel producers, who have been lobbying hard with the government to check imports, arguing that they are facing a brunt of cheap imports into the country.
"In face of huge over-capacity, the service between Frankfurt and Abu Dhabi has become increasingly uneconomical for us.