Capacity utilization is defined by which of the following ratios?
A) Effective capacity/actual output
B) Effective capacity/design capacity
C) Actual output/effective capacity
D) Design capacity/effective capacity

Question

Quizplus · Accepted Answer

Capacity utilization is the ratio of the actual output to the effective capacity. Therefore, the correct formula is Actual output/Effective capacity, which is represented by choice C. A and B use effective capacity in the numerator, which is not the correct approach. D is the reverse of the correct formula and uses design capacity in the numerator, which is also incorrect.

Capacity Utilization Is Defined by Which of the Following Ratios