Question

Allowances for which of these factors would be subtracted from design capacity when calculating effective capacity?

1) Downtime
2) Scrap
3) Rework
4) All of the above

Answer 1

Allowances for factors such as downtime, scrap, and rework would be subtracted from design capacity to calculate effective capacity, as they represent interruptions and inefficiencies in production that lower actual output.

Step-by-step explanation:

Allowances for factors such as downtime, scrap, and rework would all be subtracted from design capacity when calculating effective capacity. Design capacity represents the maximum output under ideal conditions, but to arrive at the realistic output that can be expected under normal working conditions (effective capacity), we make allowances for these factors. Downtime represents periods when the production process is not operational due to maintenance, breakdowns, or schedule delays. Scrap refers to materials or products that are deemed unusable due to defects or errors in the production process. Rework is the correction or redoing of defective products or components. All of these reduce the effectiveness of the production process and lead to lower actual output compared to the theoretical design capacity.