Under-utilisation of capacity

Underutilization of Capacity

Underutilization of capacity refers to a situation in which a company, industry, or economy fails to efficiently use its available resources to produce goods or services up to their full potential. This can result in various negative impacts on productivity, profitability, and overall economic growth. Several factors contribute to underutilization of capacity, and addressing these issues is crucial for maximizing efficiency and competitiveness.

Causes of Underutilization of Capacity:

1. Demand Fluctuations: Variations in consumer demand for products or services can lead to periods of overproduction or underproduction. Companies often struggle to adjust their production levels in response to these fluctuations, resulting in underutilization of capacity during low-demand periods.

2. Inefficient Production Planning: Poor production scheduling, inadequate supply chain _____ ____ _______ ______ ________ _______.
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