The Capacity Concept That Allows for Normal Occurrences Such as Machine

question 4

Multiple Choice

The capacity concept that allows for normal occurrences such as machine downtime and employee fatigue is known as:

• A) practical capacity.
• B) theoretical capacity.
• C) utilized capacity.
• D) management capacity.
• E) capacity maximization.

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Definitions:

Firm Forecast

A prediction or estimation about future business conditions that is relatively certain and stable.

Finished Goods Units

Products that have completed the manufacturing process and are ready to be sold.

Required Production Units

The number of units that must be produced in a given period to meet sales demands and inventory requirements.

Beginning Units

Refers to the number of units or quantity of goods on hand at the start of an accounting period.