Capacity Management Concept 9

Theoretical Capacity Management Concept

Theoretical Capacity is the amount of throughput that could be attained if a production facility were able to produce at its peak efficiency level with no downtime. Theoretical capacity should not be used for planning or bonus compensation purposes, since it is nearly impossible to attain in practice. The following factors can interfere with the ability of a facility to attain its theoretical capacity:

• Scheduled maintenance
• Unscheduled maintenance
• Raw Materials shortages
• Equipment replacements
• Labor shortages
• Power failures
• Acts of God, such as flooding and earthquakes

Theoretical capacity is also known as ideal capacity.