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WorksheetsUnderstanding Business Capacity and Utilization
Total questions: 45
Worksheet time: 27mins
Aarav, Sebastian, and Scarlett are managing a factory that has recently seen a surge in customer orders. They are discussing what they need to focus on to ensure the factory can handle the increased demand. What is the primary concept they are focusing on?
Human Resources
Capacity
Marketing
Finance
Rohan, Arjun, and Matilda are planning to expand their new bakery business. They want to understand how to measure the capacity of their bakery. In this context, how is capacity defined?
A measure of input
A measure of output
A measure of profit
A measure of employee satisfaction
At Isabella's bakery, which of the following is NOT a way to measure the bakery's capacity?
Number of customers served
Number of products manufactured
Number of employees hired
Number of interactions with customers
During a school field trip, Noah, Ella, and Emily visit a sports stadium and discuss different types of business capacities. Which of the following is an example of a fixed capacity in a business?
A cinema's ticket sales
A fast food outlet's daily sales
A sports stadium's seating
A call centre's daily calls
At a bakery where Muhammad and Evie work, the manager wants to know how efficiently the ovens are being used. What does capacity utilisation measure?
The number of employees working
The percentage of capacity used
The total revenue generated
The amount of raw materials used
Sophie manages a bakery that can produce a maximum of 1,000 loaves of bread per month. Last month, the bakery produced 800 loaves. How is the bakery's capacity utilisation calculated?
Actual output divided by total revenue
Actual output divided by maximum possible output
Total revenue divided by actual output
Maximum possible output divided by actual output
Priya runs a small factory that manufactures circuit boards. Last month, her factory produced 102,200 circuit boards, representing a 68% capacity utilisation. What is the factory's maximum capacity?
(a)
At a bakery where Neha, James, and Emily work, the manager is discussing why capacity utilisation is important for the business. Why is capacity utilisation important?
It influences the company's location
It affects the company's branding
It is linked to productive efficiency
It determines employee salaries
At Benjamin's factory, the machines are often not running and many workers have little to do. What can this low capacity utilisation indicate?
Increased profitability
Idle unused resources
Efficient resource use
High market demand
Eesha runs a small bakery, but recently she has not been able to use all of her baking equipment and staff due to fewer orders. What is a potential consequence of this low capacity utilisation?
Higher unit costs
Decreased fixed costs
Lower unit costs
Increased market share
Grace runs a bakery business. Chloe and Muhammad help her with daily operations. Why might Grace's bakery not operate at full capacity?
Excessive employee numbers
Low market demand
Too much production
High market demand
Benjamin manages an ice cream shop that sees more customers in summer than in winter. What is a reason for seasonal variations affecting capacity utilisation at his shop?
Unchanging market trends
Consistent demand throughout the year
Stable production costs
Fluctuating demand during different seasons
Lily runs a small bakery that is currently operating at low capacity utilisation. What is a danger she might face because of this?
Higher unit costs
Increased competitiveness
Lower fixed costs
Improved market position
Rosie manages a bakery that is operating at high capacity utilisation to meet increased demand. What is a potential problem she might face?
Compromised product quality
Decreased employee workload
Improved product quality
Increased quality control
Florence is managing a cleaning service company that relies heavily on staff to deliver its services. What is a significant cost of capacity in her labour-intensive business?
Raw materials
Labour
Marketing
Transportation
Benjamin manages a bakery and notices that they are not able to achieve 100% capacity utilisation. What could be a reason for this?
Need for maintenance and repairs
No need for maintenance
Unlimited resources
Constant demand
During a group project, Chloe and Alexander are discussing how much work their team can handle at different times. What is a key point about capacity that they should remember?
Capacity is always at maximum
Capacity is dynamic
Capacity is static
Capacity is irrelevant
Florence runs a factory and is analyzing how increasing capacity utilisation affects her fixed costs per unit. What is the relationship between capacity utilisation and fixed costs in this scenario?
Unpredictable
Inversely proportional
Directly proportional
No relationship
At a factory where Kiara, Harry, and Isabella work, the machines are running at full capacity to meet a large order. What is a potential risk of operating at high capacity utilisation?
Improved product quality
Decreased production speed
Increased production errors
Increased employee satisfaction
Rosie runs a bakery that recently expanded its kitchen space and bought new ovens. What is a reason her business might now have low capacity utilisation?
Consistent production levels
Stable market conditions
Recent increase in capacity
High market demand
Lily and Benjamin run a factory that is currently operating at full capacity. What is a potential benefit they might experience from this?
Higher unit costs
Lower unit costs
Decreased market share
Increased idle resources
At Henry and Emily's factory, what is a factor that can affect capacity in a production line?
Employee satisfaction
Machine maintenance
Marketing strategies
Customer feedback
At a manufacturing company where Ella, Chloe, and Mia work, management decides to push utilisation over 100% to meet a tight deadline. What is a potential issue with this approach?
Increased quality control
Improved employee morale
Decreased production errors
Compromised product quality
Neha runs a bakery that can produce 500 cakes a day, but she is currently making only 300 cakes daily. What could be a reason for Neha's bakery to operate below capacity?
Stable production levels
Unlimited resources
Lower than expected demand
Excessive market demand
Mia and Amelia run a bakery that has high fixed costs but is currently operating at low capacity utilisation. What is a potential consequence for their business?
Decreased unit costs
Higher unit costs
Increased profitability
Improved market position
Amelia runs a bakery that has recently seen a surge in customers. What is a reason for her business to increase its capacity?
Consistent employee numbers
Decreased market demand
Stable production levels
Unexpected changes in demand
Grace and Chloe run a small bakery that is currently operating at low capacity utilisation. What is a potential problem they might face?
Improved market position
Increased competitiveness
Higher unit costs
Lower fixed costs
Emily manages a bakery that experiences seasonal fluctuations in customer demand. What is a potential benefit of having flexible capacity in her bakery?
Decreased market adaptability
Increased fixed costs
Stable production levels
Improved response to demand changes
At Ella's bakery, the team is operating at high capacity utilisation to meet a surge in customer orders. What is a potential issue they might face?
Improved product quality
Decreased employee workload
Increased production errors
Stable market conditions
Ava runs a manufacturing business that produces custom furniture. She notices that sometimes her machines are not running at full capacity. What is a reason for her business to maintain some unused capacity?
To stabilise production levels
To decrease market adaptability
To increase fixed costs
To allow for maintenance and repairs
Max manages a factory that can produce 20,000 units per month. Last month, the actual output was 18,000 units. What is the capacity utilisation rate for Max's factory?
90%
80%
111%
20%
Grace is managing a factory that has been facing declining demand for its products. She decides to permanently reduce the factory's production capacity to better match the lower demand. This business policy is known as:
Outsourcing
Rationalisation
Redundancies
Depreciation
Rohan manages a factory that is currently operating at very high levels of capacity utilisation. A possible disadvantage he might face is:
Labour productivity is low
Less able to respond to sudden increases in demand
Break-even output will be higher
Cannot invest in new technology
Neha manages a bakery that can make 6000 loaves of bread per week but actually produces 4500 loaves. What is the capacity utilisation of the bakery?
25%
75%
40%
60%
Priya runs a bakery that is working at 60% capacity utilisation and is producing 9,000 cakes. What is the bakery's total capacity?
6,333 cakes
20,000 cakes
15,000 cakes
9,000 cakes
James runs a factory that currently has significant spare capacity. A disadvantage of this situation is that:
Higher return on investment in fixed assets
Employees may become de-motivated and bored
Business can respond to sudden increases in demand
Fixed costs are a low percentage of total costs
Lily manages a factory that produces electronic gadgets. Which of the following situations might result in increased spare capacity at her factory?
A major competitor goes bust
Successful response to a marketing campaign
Closure of a surplus production facility
A major product reaches end of product life cycle
Oscar runs a small bakery. He has enough ovens and workers, but sometimes the ovens are left unused during the day. What is this situation an example of?
When you don't buy enough raw materials
When you don't buy enough capital goods
When there are not enough workers to employ
When resources are not being used efficiently
In Emily's bakery, she keeps using her ovens and staff for extra shifts to meet increasing orders, even though everyone is working at their maximum capacity. What is this situation called?
When you buy too many raw materials
When you buy too many capital goods
When there are too many workers to employ
When resources are being stretched uncomfortably
Isabelle and Alexander are discussing how train companies can improve capacity utilisation during their commute. What is one way they can achieve this?
Serve food onboard
Charge more during peak times and less during off peak
Run more regular services
Buy more trains
Florence is managing a factory and decides to stop production for a while. She chooses to leave the machines and building unused but ensures they are maintained during this period. This approach is known as
A business has too many resources
Leaving machines and building unused and unmaintained.
A business reduces its resources
Leaving machines and building unused but maintained.
Oscar manages a small manufacturing company and wants to improve productivity. Which of these isn't a method he should consider?
employing more staff
providing pay incentives
investing in up-to-date machinery
training staff
At Jacob and Sophia's bakery, when they operate at high capacity utilisation, the ___________ cost are spread.
low
high
fixed
none
At a factory where Florence and Thomas work, the management has been pushing for maximum output to meet increasing demand. What is one implication of over-utilisation in this scenario?
Impact on brand image
higher fixed costs per unit
Staff may do too much overtime and so have accidents when tired
Business may need to rationalise
Scarlett runs a bakery that is currently operating at 70% of its capacity. Which one of the following statements
is true?
Fixed costs are currently lower than they would be at full capacity.
There is excess capacity.
The firm would have to take on more workers to increase production.
The firm is making a profit.
