1. What is Capacity Utilisation?

Capacity utilisation measures how effectively an organization or system is using its productive capacity. It represents the percentage of potential output that is actually being achieved.

2. How Does the Calculator Work?

The calculator uses the capacity utilisation formula:

Where:

• \( Actual \) — Actual output or usage (units)
• \( Capacity \) — Maximum possible output or capacity (units)

Explanation: The formula calculates the percentage of total capacity that is currently being utilized, providing insight into operational efficiency.

3. Importance of Capacity Utilisation

Details: Monitoring capacity utilisation helps organizations optimize resource allocation, identify bottlenecks, improve efficiency, and make informed decisions about capacity expansion or reduction.

4. Using the Calculator

Tips: Enter actual output/usage and maximum capacity in the same units. Both values must be positive numbers, with capacity greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What is considered good capacity utilisation?
A: Optimal utilisation varies by industry, but generally 85-90% is considered efficient as it allows for maintenance and unexpected demand fluctuations.

Q2: What does low capacity utilisation indicate?
A: Low utilisation may indicate underperformance, inefficient operations, or excess capacity that could be optimized or reduced.

Q3: Can capacity utilisation exceed 100%?
A: Yes, through overtime, extended shifts, or process improvements, though sustained >100% utilisation may indicate need for capacity expansion.

Q4: How often should capacity utilisation be measured?
A: Regular monitoring (weekly, monthly, or quarterly) helps track performance trends and make timely operational adjustments.

Q5: What factors affect capacity utilisation?
A: Demand fluctuations, equipment maintenance, workforce availability, process efficiency, and supply chain constraints all impact utilisation rates.