Definition How much of the available capacity is actually being used.
Example Producing 8,000 units in a factory that can make 10,000 gives 80% capacity utilisation.
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Choose your role to see what this term means in your work.
Why it matters Too low wastes resources, and too high risks delays and burnout.
Where it is used Operations reviews and capacity planning.
How to calculate it Actual output ÷ maximum possible output × 100
Worked example Producing 8,000 units in a factory that can make 10,000 gives 80% capacity utilisation.
