Capacity utilization rate in work center

[Former Member]

Dear All,

how to Calculat/deside Capacity utilization rate in work center ?

regards

Prashant

[Former Member · Accepted solution]

HI,

Capacity Utilisation rate = Actual Capacity / Theoritical Capacity

Theoritical Capacity= Shift period * No. of machines available

= 8 hrs * 2 = 16 hrs

Actual Capacity value depends on how the company decides it. Say if the break 30 mins has to be considered, then the actual capacity will be 15 hrs for 2 capacities and hence,

Capacity Utilisation rate = 15 / 16 = 93.8%

So, decide the utilisation rate based on the Company's requiremnt.

Hope the above gives you an idea.

-Thaila Shree