Question

A loan processing operation that processes an average of 5 loans per day has a design capacity of 14 loans per day and an effective capacity of 12 loans per day. What is the difference between the design capacity and the effective capacity?

1) 2 loans per day
2) 7 loans per day
3) 9 loans per day
4) 10 loans per day

Answer 1

The difference between the design capacity (14 loans per day) and effective capacity (12 loans per day) of the loan processing operation is 2 loans per day.

Step-by-step explanation:

The difference between the design capacity and the effective capacity of a loan processing operation is the measure of potential output that could be achieved under ideal conditions versus the output that is achievable under real-world conditions. In the given question, the design capacity is 14 loans per day, and the effective capacity is 12 loans per day.

To calculate the difference, we subtract the effective capacity from the design capacity:

• Design capacity = 14 loans per day
• Effective capacity = 12 loans per day
• Difference = Design capacity - Effective capacity
• Difference = 14 loans - 12 loans
• Difference = 2 loans per day

Therefore, the difference between the design capacity and effective capacity is 2 loans per day.