Question

In a manufacturing plant, the design capacity of a machine is the production of 400 units per day and the effective capacity is 300 units. Currently, the machine is producing 360 units per day. What is the machine's capacity utilisation relative to both design and effective capacity?

Answer 1

The machine's capacity utilisation is 90% of its design capacity and 120% of its effective capacity, with the machine currently producing 360 units per day.

Step-by-step explanation:

Calculating Machine's Capacity Utilisation

To calculate a machine's capacity utilisation relative to both its design capacity and its effective capacity, we use the following formulas:

• Capacity Utilisation relative to Design Capacity = (Actual Output / Design Capacity) × 100%
• Capacity Utilisation relative to Effective Capacity = (Actual Output / Effective Capacity) × 100%

Given that the design capacity is 400 units, the effective capacity is 300 units, and the current production is 360 units:

• Capacity Utilisation relative to Design Capacity = (360 / 400) × 100% = 90%
• Capacity Utilisation relative to Effective Capacity = (360 / 300) × 100% = 120%

Therefore, the machine is operating at 90% of its design capacity and 120% of its effective capacity.