Question

Amy​ Xia's plant is designed to produce 7,000 hammers per day but is limited to making 6,300 hammers per day because of the time needed to change equipment between styles of hammers. The utilization rate for the plant​ = _______%​ (enter your answer as a percentage rounded to two decimal​ places)

Answer 1

Answer: 90%

Explanation: The utilization rate is the percentage of time an asset is productive compared to its capacity.

When it applies to human capital, it is amount of billable hours compared to the total hours they are at work.

The capacity of Amy Xia's plant is 7000 hammers/day.

However, it only produces 6300 hammers/day.

Utilization rate = productivity/capacity X 100%

Utilization rate = 6300/7000 X 100%

Utilization rate = 90%