Following are the determinants of effective capacity:


The size and provision for growth are key in the design of facilities. Other facility influences include locational factors (distance to market, transportation costs, labor supply, energy sources). The design of the work area can determine how efficiently work can be performed.

Product and Service Factors:

More uniform the output, more opportunities are available for standardization of methods and materials. This leads to larger capacity.

Human Factors:

The responsibilities that are needed in certain jobs, the collection of activities involved and the training, skill, and experience required to perform a job all affect the potential and actual output. Employee motivation, absenteeism, and labor turnover all affect the output rate as well.

Process Factors:

Quantity capability is a significant determinant of capacity, but so is output quality. If the quality does not encounter standards, then output rate decreases because of need of examination and rework activities. Process improvements that increase quality and productivity can result in increased capacity. One more process factor to consider is the time it takes to change over equipment settings for different products or services.

Operational Factors:

Scheduling problems may occur when an organization or business has differences in equipment capabilities between different pieces of equipment or differences in job requirements. Further areas of impact on effective capacity include inventory stocking decisions, purchasing requirements, late deliveries, acceptability of purchased materials and parts, and quality inspection and control measures.

Policy Factors:

Management policy will affect capacity by allowing or not allowing capacity choices such as overtime or second or third shifts

Supply Chain Factors:

Questions include: What impact will the fluctuations have on suppliers, transportation, warehousing, and distributors? If capacity will be bigger, will these elements of the supply chain be able to handle the increase? If capacity is to be reduced, what impact will the loss of an organization have on these elements of the supply chain?

External Factors:

Least quality and performance standards can restrict management's choices for increasing and using capacity.


The most significant parts of effective capacity are process and human factors. Process factors must be efficient and must operate efficiently, if not the rate of output will intensely decrease. Human factors must be trained well and have experience, they must be motivated and have a low absenteeism and labor turnover. In resolving constraint problems, all possible alternative solutions must be evaluated.

operations management

January 08, 2018