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CMA Intermediate · Operations Management and Strategic Management · Operations Planning

In capacity planning, the ratio of actual output achieved to the effective capacity of a facility is called:

The ratio of actual output to effective capacity is efficiency. Utilisation compares actual output with design capacity, so it is a different measure. Design capacity is the maximum possible output under ideal conditions, not a ratio of output.

  1. AUtilisation
  2. BEfficiencyCorrect
  3. CDesign capacity
  4. DSafety capacity

Explanation

Efficiency = actual output / effective capacity. Utilisation instead compares actual output with design capacity, so it is the key distractor. Design capacity is the maximum theoretical output and safety capacity is not the ratio asked for.

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