Capacity Usage Variance (CUV) measures the difference between the actual hours worked and the budgeted hours, specifically in relation to fixed overheads. It is an essential metric in manufacturing and production, providing insights into operational efficiency and resource utilization.
A business growth strategy where a company utilizes existing equipment to produce new products with minimal addition of materials.
Economies of scope refer to cost efficiencies that a business achieves by diversifying its product lines, leveraging shared resources and capabilities to produce a wider array of products.
An efficiency ratio is a measure used to assess the efficiency of labor or an activity over a period by comparing the standard hours allowed for production to the actual hours taken. This metric, typically expressed as a percentage, helps in evaluating how well resources are utilized within a production process.
Engineered capacity refers to the maximum output that a system, facility, or entity can achieve when it is designed and operated under optimal conditions. It takes into account the inherent abilities of the system as well as external factors like technological improvements, management practices, and resource availability.
Idle capacity ratio measures the proportion of a company's total production capacity that is not being utilized during a specified period, compared to the budgeted capacity. It helps in understanding inefficiencies in resource utilization.
Explores the concept of idle capacity variance, a key metric in understanding the efficiency and utilization of resources in manufacturing and service settings.
Sub-optimization refers to the process of utilizing resources or strategies to less than their maximum potential, which results in achieving less than the optimal output or outcome.
