Difference between effective capacity and actual capacity

effective capacity and actual capacity

This is one of the most widely asked questions in Supply Chain Management. The difference between effective capacity and actual capacity;

Effective capacity:

  • Effective capacity is the maximum rate of the output which can be achieved under the operating constraints.
  • Always lower then design capacity.

Actual capacity:

  • The maximum output rate is actually achieved under the constraints of machine breakdowns, labor inefficiencies, and absenteeism.
  • Always lower than effective capacity. 

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