Production capacity

Production capacity refers to the maximum amount of goods or services a company can produce within a specific period, given its resources, equipment, and workforce. It indicates the company's ability to meet customer demand and is influenced by factors such as equipment efficiency, labor availability, and technology. Understanding capacity helps businesses plan for future growth, manage resources effectively, and avoid either overproduction or underproduction. Essentially, it’s a measure of how much a company can produce when operating at full efficiency.