Key terms(2.4.2)

Question 1

Capacity utilisation definition

Answer 1

the current output of a factory measured as a percentage of the total maximum potential output
current output / maximum possible output x 100

Question 2

Downsizing definition

Answer 2

involves reducing capacity such as making employees redundant
this would reduce costs such as wages

Question 3

Full capacity definition

Answer 3

the point where a business cannot produce any more output

Question 4

Over utilisation definition

Answer 4

the position where a business is running at full capacity and straining resources

Question 5

Under utilisation definition

Answer 5

the position where a business is producing at less than full capacity