Measures the percentage of the total production capacity that is actually being used.

What it Measures ?

Percentage of total production capacity being used.

Relevant StakeHolders 

Plant Manager, Production Planner

In-depth Use Case / Real-world Example

A company manufacturing steel beams calculates Capacity Utilization by dividing the actual production output by the maximum possible output. For example, if the plant has a maximum capacity to produce 100,000 units per month but is producing 80,000 units, the Capacity Utilization is 80%. High utilization indicates efficient use of resources, while low utilization may suggest underused capacity and inefficiencies.