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 ?
In November the Federal Reserve will publish revisions to its measures of industrial production (IP), capacity, capacity utilization, and industrial use of electric power.
Custom processing capacity utilization was highest in the Southeast and North Central regions and lowest in the South Central area.
In the first ten months of 2013, airberlin, Germany's second-largest airline company, was able to continuously increase its fleet capacity utilization by a total of 1.
The equipment suppliers attributed the impressive capacity utilization rates to anticipated strong inventory buildups at chip vendors for business in the second half of 2010 as their inventories have run low in the 2009 Christmas shopping season and will further plunge in the upcoming Chinese New Year.
With the solid gains in production, the rate of capacity utilization in durable manufacturing rose 0.
The dip in capacity utilization may partly reflect the rapid pace of processors' capacity expansion.
In the first seven months of 2013, airberlin was able to increase fleet capacity utilization to 84.
Central Bank stated on Monday that capacity utilization rate rose 7.
Capacity and capacity utilization will be revised to incorporate preliminary data from the 1997 Survey of Plant Capacity of the Bureau of the Census.
Only in the Southeast, which had above-average capacity utilization, did less than 50% of respondents expect improvement; but 59% of this group expected conditions to stay the same.
Tyson's prolonged negative beef segment operating margins stem from cyclical tightness in beef supplies, low capacity utilization and BSE-related border closures.
In June, airberlin was able to increase fleet capacity utilization by 3.