|
|
Article: Capacity, efficiency and effectiveness.
- Article from:
- Management Accounting (British)
- Article date:
- March 1, 1999
CopyrightCOPYRIGHT 1999 Chartered Institute of Management Accountants (CIMA). This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
Students of Management Science Applications often have difficulties with this particular topic area. Here CIMA Publishing gives you the chance to recap on the main principles involved.
CAPACITY
Capacity is the name given to the maximum potential number of units that a system of activities can produce within a given period of time.
Although `capacity' defines the maximum level of income for a given site (given that all production can be sold), a surprisingly large number of organisations do not know what their capacity is--they do not define it, nor manage it closely. For example, many of the utility companies manage capacity according to the ...