A plant with design capacity of 100 units/day currently produces 80 units. What is its utilisation?

Rationale

Utilisation is calculated as the ratio of actual output to design capacity, resulting in 80% for this plant.

Utilisation measures how effectively a plant operates relative to its maximum capacity. In this case, the plant produces 80 units out of a design capacity of 100 units, leading to a utilisation rate of 80%.

A (80%) CORRECT

This choice accurately reflects the calculation of utilisation, which is determined by dividing the actual output (80 units) by the design capacity (100 units) and then multiplying by 100. Thus, (80/100) * 100 = 80%.

B (100%) YOUR ANSWER

This option incorrectly suggests that the plant is operating at full capacity. A utilisation of 100% would mean the plant produces 100 units, which is not the case here as the actual output is only 80 units.

C (125%) YOUR ANSWER

This choice implies that the plant is exceeding its design capacity, which is impossible for a plant with a maximum output of 100 units. A utilisation greater than 100% would indicate production beyond design capacity, contradicting the available output of 80 units.

D (20%) YOUR ANSWER

This option misrepresents the utilisation calculation. A utilisation of 20% would imply that the plant is only producing 20 units out of 100, which does not align with the actual output of 80 units.

Conclusion

Utilisation is a crucial metric to evaluate the efficiency of production in a plant. For this scenario, the actual output of 80 units compared to a design capacity of 100 units confirms an utilisation rate of 80%. The incorrect options either misinterpret the concept of utilisation or present unrealistic figures based on the given production capabilities. Understanding these calculations is essential for assessing productivity and operational performance in manufacturing settings.

A plant with design capacity of 100 units/day currently produces 80 units. What is its utilisation?

Utilisation is calculated as the ratio of actual output to design capacity, resulting in 80% for this plant.

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