Capacity limits the capability of the organization. Although such capability limitation can be overcome to some extent by introducing multi-shifts or by subcontracting, but, by and large, such capacity can be quantitatively described as follows:
1. Licensed Capacity:
This denotes the actual capacity licensed by the concerned government authorities. Before starting the actual production, an organization needs to declare such required capacity, which government authorities finally vouch after due inspection of available facilities in the organization.
In reality, a particular organization may obtain higher licensed capacity, keeping in view the future expansion requirements.
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2. Installed Capacity:
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It represents capacity in terms of machines actually installed. Machines procured for installation have some defined capacity, as provided in their printed literatures. Summation of such capacity gives a total installed capacity. As explained earlier, installed capacity may not be exactly at the same level of licensed capacity for the obvious less installation of the plant facilities by the organization, without adequate commercial run.
Total requirement of the wire meshes =4.33
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Net requirement of wire meshes =4
3. Rated Capacity:
This denotes the actual performance efficiency of the machines, which can be understood after trial run. Obviously, the highest production rate becomes the benchmark. However, deciding the capacity rate based on the single one-time highest achievement may not be always correct. It is necessary to assume the average of performance rate of machines over a time period for more effective rating decision.