Role of Capacity in Design: Measurement & Types

Lesson Transcript
Instructor: Brianna Whiting

Brianna has a masters of education in educational leadership, a DBA business management, and a BS in animal science.

In this lesson, we will get a look at what it means when a firm reaches capacity. Specifically, we will gain a better understanding of the different types and measurements affiliated with capacity. The lesson concludes with a summary and quiz.

A First Look at Capacity

Meet Bob! Bob runs a car factory that employs 100 people to run the factory's various machines. Each month, there is a demand for new cars, and Bob understands that in order to fulfill that demand he needs to produce a certain number of new cars. However, what happens when a machine breaks, or an employee gets sick and can no longer operate a machine? Can the factory still meet the demand? What Bob may be tempted to do is run at capacity.

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  • 0:01 A First Look at Capacity
  • 0:33 Capacity Defined
  • 1:29 Types of Capacity
  • 2:43 Measurements of Capacity
  • 3:33 Lesson Summary
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Capacity Defined

Capacity is the highest capable output of a good or service when a machine or employee is working at full maximum potential. This maximum output at full potential occurs over a specific amount of time and can be measured in hours, days, weeks, etc. While Bob may be tempted to run at capacity, it is important to point out that this cannot happen for extended periods of time, as machines can break, employees get tired, and other factors involved in the production process can interfere. For example, if Bob decides to run at capacity, he might be able to produce 15 cars in one week. However, because the machines need to be serviced, and employees might have scheduled days off, Bob can only reasonably expect to produce just 12 cars a week. If, however, Bob decides to purchase more machines and hire more employees, the factory may be able to produce even more cars.

Types of Capacity

Theoretical capacity occurs when output is at its highest maximum output without any scheduled downtime for issues such as scheduled maintenance of the machines. In other words, in order to fulfill theoretical capacity, supervisors like Bob would have to produce as many goods as possible without any scheduled services or shutdowns of the machines. An example of this would be in a perfect world where machines never break, and employees never get tired of working. Both would continue to work at full potential without any stops.

Rated capacity is utilized more when actually trying to establish a quantity, specifically when computing calculations. Basically, rated capacity is used when a company wants to actually do the math and analyze the actual value for capacity. For example, a company that makes washing machines may know that their machines have a two-year warranty and thus should last on average of two years. So, out of 100 washing machines, some will last longer then two years, and some will last fewer then two years. Therefore, the company may try to design the machine so that a greater percent of their machines fall within the longer than two-year range.

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