Enter the current production output and the maximum production output into the calculator to determine the capacity utilization.
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Capacity Utilization Formula
The following formula can be used to calculate capacity utilization.
CU = CO / MO *100
- Where CU is the capacity utilization (%)
- CO is the current output
- MO is the maximum potential output
To calculate capacity utilization, divide the current output by the maximum potential output, then multiply by 100.
Capacity Utilization Definition
Capacity utilization is defined as the ratio of current output to total output possible.
Capacity Utilization Example
How to calculate capacity utilization?
- First, determine the maximum output.
Using either design figures or past experience, calculate the total maximum output that the plant can produce. For this example, we will say the maximum output is 100,000 units per month
- Next, determine the current output.
Measure the current output of the plant over the past month. For this example, we will say that we hit 75,000 units.
- Finally, calculate the capacity utilization.
Using the formula above, we find the capacity utilization to be 75,000/100,000 * 100 = 75%.
FAQ
Capacity utilization is a percentage of the current production output with respect to the maximum capacity output.
