Available Capacity is the process that involves the determination of the potential of a unit to perform a specific task within a set time framework. The capacity to deliver an expected output varies from industry to industry.
Based on the business the available capacity has to be ascertained. It can in terms of volumes, quantity and compare the same with standard available capacity of the firm. The available capacity can be determined for single resources or for a set of resources put together. The process helps in overall business planning and inventory management.
Determining the ideal working hours
The working hours of an organization are crucial to determine the production capacity of the unit. However, the working hours comprises of the breaks, technical glitches faced during those hours and any organizational problems that might arise. Breaks are generally deducted to attain the working hours. They are also known as the theoretically available hours.
The productive working hours gained after deducting the technical and organizational problems are known as the operating time. Similarly, the capacity utilization can be used to understand the percentage of the operating time of a unit in production.
The differences obtained while calculating the available capacity is known as the version number. The active version number is further used in scheduling and planning of capacity requirements.
Get more definitions about Available capacity and other ERP related terms here.