Capacity Utilization Rate Online Calculator

  • Rev
  • 1 minute read
  • February 17, 2024

Capacity utilization rate is a metric utilized to determine the degree to which an organization utilizes its production capacity. To express it as a percentage, it is computed by subtracting the actual output from the maximum possible output, dividing the result by the maximum possible output, and finally multiplying the result by 100. This metric signifies the degree of resource utilization efficiency with which a business generates revenue; greater rates indicate superior resource utilization.

As an illustration, suppose a factory is capable of manufacturing 4,000 units per day but solely generates 2,000 units. In this case, the capacity utilization rate is 50%, which is computed as (2,000 / 4,000) x 100%.


What is Current Output?

Current output is the total amount of goods or services produced in a specific time frame. It is what a company is currently producing.


What is Maximum Possible Output?

Maximum Possible Output is the most a business can produce using all its resources. It is the highest level of production a company can achieve.


How to Use the Capacity Utilization Rate Calculator

Using the calculator is easy:

Step 1:

Enter the number of goods or services your company is currently producing.

Step 2:

Enter the maximum amount your company can produce.

Step 3:

Click calculate to see the percentage of capacity your company is using.

You may also like: