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Q2: Find the efficiency and utilization and distinguish in detail between them . (15 marks)LO3.4.6 Design...

Q2: Find the efficiency and utilization and distinguish in detail between them . LO3.4.6

Design capacity = 150 units/day

Effective capacity = 120 units/day

Actual output = 108 units/day

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Answer #1

Solution:

Utilisation:

Efficiency:

Utilization is related to the utilization of the overall available facility by design. Hence, we find utilization using design capacity. However, utilization does not represent the efficiency of the process. Hence, for efficiency, we consider the effective capacity that is actually being used for generating the output.

In order to measure the effectiveness of the process we must check for the efficiency of the process. If we are concerned about the financial aspects of the facility, then we can check for the utilization which is a better measure to understand the costing of the process or plant.

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