Demonstrated capacity is proven capacity calculated from actual performance data, usually expressed as the average number of items produced multiplied by the standard hours per item.

For example, a company produced 100,120,110,120, &130 standard hours of work over a period of  five weeks.

Then Demonstrated capacity = Standard hours/ number of weeks

= 100+120+110+130+120/5

                                            =  116 standard hours


Get more definitions about Demonstrated capacity and other ERP related terms here.


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