The document discusses different types of capacities for production facilities: designed/rated capacity is the maximum output achievable under ideal conditions; planned capacity accounts for expected downtime and is lower than designed capacity; demonstrated capacity is the actual average output achieved over time, which may differ from planned capacity due to factors like product mix, machine health, and quality issues. Load refers to the scheduled or actual work released for production, whereas capacity is the maximum output a facility can produce.

2. Introduction
 Capacity of a facility is referred to as its capability to
produce. Capacity is the rate of output from an
operating system per unit time. Capacity is based on
the output that the system can produce, store and
transport.

3. Distinction between load and
capacity
 Load and capacity are different from each other. Load
is the amount of planned work scheduled and actual
work released to a facility, work center or operation for
a specific time. Load is usually presented in terms of
standard hours of work or units of production. Load is
classified as planned load and released load. Planned
load is calculated on the basis of work to be done in
future period in the work center. Released load is the
actual manufacturing order released for production
but might not have been carried out at work center.

4.  Capacity on the other hand is the capability of the
system to perform the expected functions. Capacity is
also the capability of machine, work center, plant,
worker or organisation to produce the output in a time
period. In short the amount of work that can be
produced by a work center is known as capacity
whereas the amount of work that needs to be
produced to meet the plans is the load.

5. Classification of capacity
Designed or rated capacity
Planned capacity
Demonstrated capacity

6. Designed or rated capacity
Designed capacity is also the maximum capacity, which a facility can achieve. It defines the highest normal output
that a process could achieve. Designed capacity is usually higher than the normal output rate.
The designed capacity of a process is calculated by taking into account the following things.
Number of machines available
Capacity of each machine
Number of shifts operated
Duration of each shift
Number of workdays in the period under consideration

7.  Capacity of the process is expressed in terms of above
factors as shown below:
CN1 N2 N3 H
C=Capacity of machine per hour
N1 = number of machines
N2 = number of shifts per day
N3 = number of days in time period
H= hours in each shift

8. The above calculations based on
following assumptions:
The workers have the same efficiency
There is no loss of time during change over
No machine breakdown
Planned shutdown not included
No overtime
Work at normal rate
No loss of time due to worker problems

9. The maximum capacity can be
changed by the following actions
Increase the no. of machines
Increase the no. of operating hours in shift
Increase the no. of shifts
Deploy trained manpower
Avoid loss due to scrap or damages
Control waste time by workers
Give incentive for higher production
Outsource part of work load

10. Planned capacity
Planned capacity is the capacity, which is maintained or achieved in normal operations.
Production plans and schedules are worked out based on planned capacity. Planned capacity is
usually less than the designed capacity due to following reasons.
Unexpected demand from some customers
Preventive and predictive maintenance need time and influence the available time for production.
Corrective breakdown
Cannot run at full capacity for so long as even machines need rest

11. Efficiency= Standard time/ Actual time
Utilization= Actual hours/Scheduled
available hours
Planned capacity= Designed capacity X
efficiency X utilization factor

12. Demonstrated capacity
 The actual level of output for a process over a period of
time is known as the demonstrated capacity.
Demonstrated capacity deals with the actual
performance over a time rather than the calculated
designed capacity or planned capacity. Demonstrated
capacity is determined by averaging the recorded
figure of actual outputs over a period of time. It might
differ from both the designed capacity and planned
capacity for various reasons such as

13. Product mix
Operator skill and experience
Health of machines or equipments
Type of jobs
Quality of material
Inaccurate standard for process performance
Idling time
Blockages
Rejection due to poor quality
Training time of operators
Other factor