Utilization will always be lower than efficiency because
A) effective capacity is less than design capacity.
B) effective capacity is greater than design capacity.
C) effective capacity equals design capacity.
D) utilization and efficiency are equal in value.
E) utilization is normally greater than efficiency.

Question

Quizplus · Accepted Answer

Utilization is the ratio of actual output to design capacity while efficiency is the ratio of actual output to effective capacity. Effective capacity is always less than design capacity due to factors such as maintenance, worker fatigue, and other practical limitations. Therefore, utilization will always be lower than efficiency.

Utilization Will Always Be Lower Than Efficiency Because