Output Measures of Capacity: Output

Output Measures of Capacity: Output measures of capacity are best utilized when applied to individual processes within the firm or when the firm provides a relatively small number of standardized services and products. High-volume processes, such as those in a car manufacturing plant, are a good example. In this case, capacity would be measured in terms of the number of cars produced per day. However, many processes produce more than one service or product. As the amount of customization and variety in the product mix increases, output-based capacity measures become less useful. Then input measures of capacity become the usual choice for measuring capacity.