a. Calculate the weekly capacity of the plant.
(1) State the Definition:
b. If the firm produces the quantity shown below, at what percentage of the capacity will it be operating each week?
(1) What ratio are you calculating?
(2) State the formula:
1.Definition: Weekly capacity simply is the amount of unit a machine can make given the number of hours a machine runs in a day.
The no of units/week = 375 units per hour * 8 hours per shift *2 shifts per day* 6 days per week
The no. of units/week = 36,000 batteries
1)We are calculating Capacity Utilization Ratio
2)Capacity utilization Ratio : Acutal or Forcasted Demand/ Capacity of the machine