Business – 4.3 Capacity utilisation and outsourcing – Capacity utilisation | e-Consult
4.3 Capacity utilisation and outsourcing – Capacity utilisation (1 questions)
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Advantages
- Provides a clear indicator of how efficiently a company is using its fixed assets, helping to identify under‑used resources.
- Facilitates benchmarking against industry standards or competitors, supporting strategic decisions about expansion or contraction.
Limitations
- Does not reflect the quality of output or the level of demand; high utilisation may mask poor product quality or over‑reliance on a single customer.
- Can be misleading if the maximum capacity figure is outdated or if temporary factors (e.g., maintenance, seasonal peaks) distort the measurement.