capacity


Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Idioms, Encyclopedia, Wikipedia.

Capacity

Credit grantors' measurement of a person's ability to repay loans.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Given that electricity prices are linked to gas prices, a sharper expansion in gas prices at any given profit margin should result in greater income for new capacity from the electricity market in absolute terms.
As mentioned above, capacity is one of the most important measures of resources used in production.
Injection capacity: 1.3 to 16.4 oz, rates to 18.79 cu in./sec
The annual production capacity of the machine will remain at 120,000 metric tons.
In many IT environments it is difficult to add storage capacity to existing file systems without user disruption.
* The energy industry in the United States and much of the world today lacks the capacity to transform raw energy supplies into the product volumes needed and demanded by consumers.
- Pakistan: a new plant with annual capacity of 500,000 units will become operational in April 2006.
In this study, two teachers characterized as humble and reluctant initially described themselves as "quiet listeners" and began with a capacity of 0.
* with capacity tight and the paramount need to develop new sources of supply, OEMs are finding themselves unable to effectively respond because their "procurement" departments are staffed with inexperienced MBAs who know little about the industry to which their suppliers belong.
The DNA repair capacity of the breast cancer patients proved to be significantly lower than that of their sisters without breast cancer.
The company's report: 'Global Polyethylene Industry Outlook to 2023 - Capacity and Capital Expenditure Forecasts with Details of All Active and Planned Plants' reveals that around 159 planned and announced plants are scheduled to come online, predominantly in Asia and the Middle East, over the next five years.
We expect the pace of new capacity investment will accelerate after 2020 as capacity is absorbed.

Full browser ?