Definition Definition


General Definition:

Capacity is the ability to accumulate a certain amount of something which is the absolute limit. The maximum volume of a particular material that something can hold is the capacity of the respective container. Example: The capacity of the refrigerator is 300 cc.


Definition in Business:

The capacity of any machine or company is its ability to produce the maximum volume of goods under certain conditions (time, cost, resources etc.). Example: Our factory is willing to triple its production capacity by the end of next year.


Definition in Professional Sector:

Capacity may also refer to the certain role or position (mostly in professional settings) an individual may take up in a particular office or company. Example: The Human Resource Manager of the company had initially joined the office in a voluntary capacity.


Types of Capacity:

There are three main types of capacity that accumulates to the total capacity -

  1. Production (the maximum amount of production possible),
  2. Protective (an additional amount to ensure the maximum production) and
  3. Idle Capacity (the capacity remaining unused due to external factors)

For example, if a candy factory’s production capacity is 3000 kilos per week that means the factory is able to produce 3000 kilos of candy every week. That is what the factory is capable of producing but other factors (labour, capital, raw materials etc.) too, have a play in this.


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