HSC Production Management and Marketing 1st Paper 8th Chapter Note Production Capacity. Productive capacity is the maximum possible output of an economy. According to the United Nations Conference on Trade and Development (UNCTAD), no agreed-upon definition of maximum output exists. UNCTAD itself proposes: “the productive resources, entrepreneurial capabilities and production linkages which together determine the capacity of a country to produce goods and services.” The term may also be applied to individual resources or assets; for instance, the productive capacity of an area of farmland.
HSC Production Management and Marketing 1st Paper 8th Chapter Note Production Capacity
Understanding production capacity allows a business to estimate future financial performance and create a timeline for delivering products. The formula for production capacity is machine-hour capacity divided by the time it takes to produce one product. Production capacity can be calculated based on a single type of product or a mix of products.
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