Question

You have been approached by one of the staff who works testing equipment that passes through your facility. Every day, you receive computers from the university that have been repaired but now need to be tested to ensure that they can work under high stress. This means running them in your test labs. Because the test labs are as stressful on the test equipment as it is on the computers, you have planned for downtime in the past. To get this downtime, you have tried to ensure that effective capacity utilization is about 72 percent. Yet, the staff person has informed you that a backlog of yet-to-be tested equipment is building up. Furthermore, the test equipment is now starting to break at a rate faster than anticipated. To address this issue, you know that the design or maximum capacity is 920 hours and that over the last three weeks, you have spent 770 hours per week testing equipment. Based on this data, what is our effective capacity utilization? (Round your answer to 1 decimal place.)

Answer 1

Given that,

Design capacity = 920 hours

Actual output = 770 Hours

Effective capacity utilization = Actual output / Design capacity

= 770 / 920

= 0.8369 = 83.7%