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 ?
Testamentary capacity focuses exclusively on an individual's mental faculties and ability to form a meaningful understanding of the relevant aspects of the environment.
A lack of knowledge and approval on the part of the testator of the contents of the 2000 Codicil and 2001 Will (if contrary to earlier finding, the testator possessed testamentary capacity); and
Instead, these rules restricted the testamentary capacity of all
Even after codification, the testamentary capacity standard was not clear.
(133) This position depends on the client having testamentary capacity, and could not arise if the solicitor rightly believed that the client lacked capacity but, against the solicitor's advice, the solicitor was still instructed to prepare a will.
In contrast to the legal question regarding testamentary capacity, the question as to whether an elderly client has the mental capacity to make reasonable decisions regarding daily maintenance of a household, individual care, decisions as to health care and management of financial affairs is a medical one.
Foye had asked questions of his client designed to elicit responses directly relevant to the three-part testamentary capacity test.
The children are contesting the Will, stating that the decedent lacked testamentary capacity to create the Will, and that the defendants unduly influenced the decedent in the creation of the Will.
In his ruling last year, Mr Justice Lewison accepted that Mr Perrins did not have testamentary capacity" when the will was made - but nevertheless upheld it as valid because of instructions he had given to a solicitor the previous year that he wanted Ms Dooney to be his heir.
(10) The beneficiary's isolation of the decedent denied the daughter all access to the decedent, such that "the ties of fatherly affection [were] destroyed." (11) The court stated that based on these facts, it would have invalidated the will on the grounds of undue influence alone without any evidence of lack of testamentary capacity. (12)
The material is contained in 3 volumes, with sections on testamentary capacity and power, execution and revocation of wills, probate of wills, the appointment and qualification of executors and administrators, assets and inventory, and will forms, among other topics.