Business – 4.3 Capacity utilisation and outsourcing – Capacity utilisation | e-Consult
4.3 Capacity utilisation and outsourcing – Capacity utilisation (1 questions)
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Three common methods are:
- Increasing working hours (e.g., overtime or additional shifts)
- Advantages: Quick way to raise output without major capital investment; utilizes existing equipment.
- Disadvantages: Higher labour costs; risk of employee fatigue and reduced quality.
- Improving process efficiency (e.g., lean manufacturing, reducing waste)
- Advantages: Sustainable long‑term gains; lower operating costs; often improves product quality.
- Disadvantages: Requires training and possible cultural change; initial implementation can be disruptive.
- Investing in technology upgrades (e.g., automation, faster machinery)
- Advantages: Increases maximum output capacity; can reduce reliance on overtime.
- Disadvantages: High upfront capital cost; potential downtime during installation; may require new skills.