Q&A - What is meant by production capacity?

Capacity can be defined as: the maximum output that a business can produce in a given period with the available resources

Capacity is usually measured in production units (e.g. 1,000 cars per month or 50,000 meals per day).

Productive capacity can change e.g. when a machine is having maintenance, capacity is reduced

Capacity is linked to workforce planning: e.g. by working more production shifts, capacity can be increased

Capacity needs to take account of seasonal or unexpected changes in demand. For example,

- Chocolate factories need capacity to make Easter Eggs in November and December before shipping them to shops after Christmas
- Ice-cream factories in the UK needed to quickly increase capacity during a heat wave