DEFINITION of 'Activity Capacity'

The degree to which a particular action is expected to perform. Activity capacity refers to an activity's upper threshold of performance based on historical results and future expectations. An example could be the rate of output for a machining activity measured in terms of cycles per hour. Activity capacity involves a specified set of resources and an extended period of time, taking place under normal or expected operating conditions.

BREAKING DOWN 'Activity Capacity'

Activity capacity measures an activity's anticipated performance, taking into consideration such variables as the availability of space, machinery, labor and materials. Activity capacity can be measured in terms of dollars, labor hours, weight, size or any other unit of measure in which an activity is performed.

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