Which term defines the maximum output rate a facility can achieve under ideal conditions?

Capacity utilization measures the percentage of the potential output that is actually being achieved in a facility. It is calculated by comparing the actual output to the design capacity. While it provides insights into how effectively a facility is operating, it does not define the maximum possible output itself.

Capacity planning is the process of determining the production capacity needed to meet changing demands for products. It involves forecasting future needs and making adjustments to ensure that a facility can meet these demands. However, it does not directly define the maximum output rate achievable under ideal conditions.

Effective capacity refers to the maximum output a facility can realistically achieve considering normal operating conditions, such as maintenance and breakdowns. It is typically lower than design capacity and reflects real-world limitations, thus not representing the theoretical maximum output.