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 ?
Industrial production and capacity utilization will continue to be based on the 1987 Standard Industrial Classification (SIC) until the 2002 annual revision, after which they will be constructed from the North American Industrial Classification System (NAICS).
The positive development of the capacity utilization is also reflected in the figures for the accumulated period from January up to and including November 2015.
(HCG), a seasoned supplier of ceramic bathroom fittings, which, with considerable backlogged contract orders, will run at a capacity utilization rate of around 90% to post strong shipments in March through April.
The capacity utilization rate was 67.3 percent in March 2010, and 73 percent in February 2011.
Continuous monitoring and in-depth reporting on capacity utilization, data usage patterns, resource availability, and policy effectiveness
In recent months, capacity utilization has fallen significantly in the transportation equipment and primary metals industries.
Capacity utilization, which reportedly exceeded 100% over the last couple of years, is expected to average above 90% this year.
At 86.6 percent, the overall capacity utilization rate (RPK/ASK) remained approximately at the level of the previous year (-0.4%).
For its loss in the first six months, AUO stressed that it will stringently adjust inventory, capacity utilization, and focus on shipments of newer-technology products.
On annual basis, capacity utilization rate increased in all main industry groupings --which includes durable and non-durable consumer goods, consumer goods, intermediate goods, investment goods-- except for food and beverages.
Still, a strong prevailing wind constantly blows in the direction of more open and more productive technology: LAN-free backup becoming server-less then NDMP-standardized, virtualization increasing capacity utilization and vendor-neutral capacity assignment.
Capacity utilization for total industry rose 0.1 percentage point, to 82.3 percent, a level 0.3 percentage point above its 1967-99 average.