Production Limits

Overrun
The concept of overrun in production refers to exceeding predefined production limits, often due to estimation errors, reduction in order size, or attempts to utilize excess materials.
Practical Capacity
Practical Capacity is the highest activity level at which a factory can operate efficiently, considering unavoidable losses of productive time such as vacations, holidays, and equipment repairs. It is also known as maximum practical capacity.

Accounting Terms Lexicon

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