Given the following information, what would efficiency be?
Effective capacity = 80 units per day
Design capacity = 100 units per day
Utilization 48 percent
80 percent
35 percent
48 percent
20 percent
60 percent
The correct answer and explanation is :
To calculate efficiency, we need to understand the following terms:
- Effective Capacity: This is the maximum output that a system is capable of achieving under normal conditions, considering factors like downtime, maintenance, and other limitations. In this case, the effective capacity is 80 units per day.
- Design Capacity: This represents the maximum output a system is designed to achieve under ideal conditions. In this case, the design capacity is 100 units per day.
- Utilization: This is the ratio of actual output to design capacity, showing how much of the designed capacity is being used. Utilization is given as a percentage.
Now, efficiency is calculated using the formula:
[
\text{Efficiency} = \left( \frac{\text{Actual Output}}{\text{Effective Capacity}} \right) \times 100
]
To find the actual output, we use the information about utilization. Utilization is the ratio of actual output to design capacity:
[
\text{Utilization} = \frac{\text{Actual Output}}{\text{Design Capacity}} \times 100
]
Given that the utilization is 48%, we can solve for the actual output:
[
48\% = \frac{\text{Actual Output}}{100} \times 100
]
[
\text{Actual Output} = 48 \, \text{units/day}
]
Now, we can calculate efficiency:
[
\text{Efficiency} = \left( \frac{48}{80} \right) \times 100 = 60\%
]
So, the efficiency is 60%.
Explanation:
Efficiency is a measure of how well a system performs compared to its effective capacity, and it accounts for the quality of the output relative to the resources that are realistically available. In this case, while the system is designed to handle 100 units per day, it is operating at 48% utilization of its design capacity, producing only 48 units per day. However, the system’s effective capacity is 80 units per day, and the output of 48 units is 60% of that.
In simple terms, efficiency reflects how well the available capacity (effective capacity) is being used in relation to the actual output, showing that 60% of the available capacity is being used to produce the actual output. This reflects a gap in utilizing available resources effectively.