Utilization of Plant Capacity in Minnesota Dairy Manufacturing Firms

Report Introduction: Productive capacity is one of the oldest and most frequently used concepts in economics. It is also one of the most elusive. A wide range of meanings has been attached to it, depending in part upon the purpose for which the concept is to be used and in part upon whether the problem involved is examined in engineering or economic terms. The term capacity is usually defined as the quantity of output that a plant can produce per unit of time with a given supply of equipment, labor, and materials. It is usually assumed that labor and materials will be available in the necessary quantities and qualities and that the limiting factors are the size of plant and equipment. Operating standards which determine the intensity of use are also involved in measuring capacity. For purposes of this study, the capacity of a dairy manufacturing plant refers to the total volume of milk which could be manufactured into dairy products during a 24-hour period, including time for cleaning equipment. This study deals with capacity as utilized in dairy plants operating in Minnesota during 1963. Plant capacity, receipts, and other plant characteristics, including utilization of capacity, are discussed and various factors associated with capacity utilization are analyzed.