capacity

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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 ?
Correlation between slow vital capacity and the maximum phonation time in healthy adults.
(8) found increased values of forced vital capacity, forced expiratory volume in one second, FEV1/FVC ratio, peak inspiratory flow in runners which is in correlation with our study.
Clinical significance of low forced expiratory flow between 25% and 75% of vital capacity following treat pulmonary tuberculosis: a cross-sectional study.
In order to measure forced vital capacity LUNG TEST 1000 spirometr which is a static and modifier system designed for pulmonary function test, was applied.
There was no significant difference in the Vital Capacity which revealed that the eight week training programme of Ujjayi Pranayama was not effective in this variable.
A large portion (80%) of vital capacity is used, especially during loud singing (Haas, Pineda, & Axen, 1989).
It increases vital capacity and rib cage mobility, improves diaphragm function, helps clear airway secretion, and may improve immune function.
A significant correlation was noted between disease extent score and forced vital capacity (FVC) (r = -0.76; P=0.003), forced expiratory volume in one second ([FEV.sub.1])(r = -0.74; P = 0.005), total lung capacity (TLC) (r = -0.66; P = 0.037), oxygen saturation in arterial blood (Sa[O.sub.2]) (r = -0.69, P = 0.01), diffusion capacity of the lung (DLco) (r = -0.8; P = 0.02).
The Forced Vital Capacity is not exactly the same as the Vital Capacity, because one is measured when the air is being forcibly inhaled and exhaled, and the other is measured when the air is inhaled and exhaled at normal breathing speeds.
In general, restrictive impairment, orreduction of vital capacity (VC) and total lung capacity (TLC), is evident.
The losses in forced vital capacity were similar but of a smaller magnitude.
Pulmonary function test results were as follows: forced vital capacity (FVC), 3.46 L (91%); forced expiratory volume in 1 sec ([FEV.sub.1]), 2.31 L (74%); [FEV.sub.1]:FVC ratio, 67; total lung capacity, 5.27 L (95%); residual volume, 1.57 L (91%); diffusion capacity for carbon monoxide, 23.1 mL/mmHg/min (81%); and diffusion capacity for CO corrected for total lung capacity by single breath, 4.61 mL/mmHg/L (87%).