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Measurement of Capacity Utilisation
How can businesses determine their maximum capacity?
Businesses can determine their maximum capacity by analyzing factors such as production capabilities, resource availability, technology, and infrastructure.
What are the formula and calculations involved in measuring capacity utilization?
Capacity utilization can be calculated using the formula: Capacity Utilization = (Actual Output / Maximum Capacity) x 100%. Actual output represents the quantity of goods or services produced during a specific period, and maximum capacity refers to the maximum achievable output within the same period under normal operating conditions.
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