Q&A - What is meant by production capacity?

Capacity can be defined as: the maximum output that a business can produce in a given period with the available resources

Capacity is usually measured in production units (e.g. 1,000 cars per month or 50,000 meals per day).

Productive capacity can change e.g. when a machine is having maintenance, capacity is reduced

Capacity is linked to workforce planning: e.g. by working more production shifts, capacity can be increased

Capacity needs to take account of seasonal or unexpected changes in demand.  For example,

- Chocolate factories need capacity to make Easter Eggs in November and December before shipping them to shops after Christmas
- Ice-cream factories in the UK needed to quickly increase capacity during a heat wave

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Kate & Wills - A Short-term boost to demand [9 Apr 2011]
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Commodity prices in action - soaring Copper [6 Feb 2011]
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Nissan profits from a recovery in demand [30 Jul 2010]
Demand for Foreign Holidays Takes a Sharp Dip [14 Jul 2010]
World Cup 2010 Business Winners and Losers [13 Jul 2010]
Emerging from Recession - Manufacturing Leads the Way [1 Jun 2010]
Strategy Case Study - Vauxhall/Opel restructuring [24 May 2010]
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The dangers of focus on one product [9 May 2010]
Corus chief calls for more government funds for the economy [8 Apr 2010]
BUSS4 Research - a Corus of Disapproval [1 Mar 2010]
Managing a recruitment business through the recession [16 Feb 2010]
Taking Demand-based Pricing To Extremes [8 Feb 2010]
Video case study - substitute goods benefiting from the recession [1 Feb 2010]
Strategy in a recession - Fusion Systems [1 Feb 2010]
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Revision Presentation - Capacity Management [19 Dec 2009]
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Outdoor Ice-skating heads firmly down the product life cycle [3 Dec 2009]
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Emerging Markets - China’s Growth in Charts [5 Nov 2009]
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Auto Warriors - the Capacity Management Reality Show [28 Oct 2009]
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Demand is booming for UK Cinemas [16 Sep 2009]
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A dramatic fall in business investment [27 Aug 2009]
Strategic business decision-making - Network Rail [26 Aug 2009]
Plastic car is a blast from the past [25 Aug 2009]
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Batch production in action - cricket bats [12 Jul 2009]
Welsh Business Benefits from the Ashes [8 Jul 2009]
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Spare capacity prompts a fall in business investment [4 Jul 2009]
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