DEFINITION of 'Activity Capacity'

Activity capacity refers to an activity's upper threshold of performance based on historical results and future expectations. Activity capacity involves a specified set of resources and an extended period of time, taking place under normal or expected operating conditions. Essentially, it is the amount of work or activity that can be completed within a particular amount of time given a certain amount of resources.

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.

Example of Activity Capacity

An example could be the rate of output for a machining activity measured in terms of cycles per hour.

RELATED TERMS
  1. Capacity Management

    Capacity management is the management of the limits of an organization's ...
  2. Capacity Utilization Rate

    The capacity utilization rate is a metric used to measure the ...
  3. Active Investing

    Active investing refers to an investment strategy that involves ...
  4. Capacity

    Capacity is the maximum level of goods and services output that ...
  5. Active Trading

    Active trading is the buying and selling of securities with the ...
  6. Active Stocks

    Active stocks are heavily-traded stocks on an exchange, which ...
Related Articles
  1. Investing

    Active Share Measures Active Management

    Active Share determines the extent of active management being employed by mutual fund managers.
  2. Investing

    What You Should Know About Risk Tolerance and Risk Capacity

    When deciding how to invest, you need to consider your risk tolerance and your risk capacity.
  3. Investing

    How to Determine the Best Investment Strategy for You

    Before choosing passive or active investing for your portfolio, understand the differences.
  4. Investing

    Is Active Management Making a Comeback?

    The performance of actively-managed funds is starting to surpass their passive rivals. Here's why.
  5. Insights

    Google and Facebook to Build an Undersea Cable Between LA and Hong Kong (GOOG, FB)

    The Pacific Light Cable Network (PLCN) will be the highest capacity trans-Pacific route with 12,800 km of fiber and an estimated cable capacity of 120 terabits per second (or, the capacity to ...
  6. Financial Advisor

    Passive vs. Active Management: Which is Best?

    Portfolio performance is as much about picking asset classes as picking stocks. Timing the market, however, is something else altogether.
  7. Retirement

    Active vs. Passive Investing During Retirement

    How these two investing approaches work – and how to decide which best suits your precious nest egg.
  8. Investing

    Passively Managed Vs. Actively Managed Mutual Funds: Which is Better?

    Learn about the differences between actively and passively managed mutual funds, and for which types of investors each management style is best suited.
  9. Retirement

    Save More for Your Retirement by Managing Risks

    To fund your lifestyle in retirement you need to balance your risk capacity and tolerance.
  10. Investing

    The 4 Key Elements of a Well-Managed Portfolio

    Be sure the manager of your actively managed portfolio isn't neglecting these four items.
RELATED FAQS
  1. What are the primary activities of Michael Porter's value chain?

    Understand the primary activities of Michael Porter's value chain, and learn how a company can optimize those activities ... Read Answer >>
  2. How should I evaluate a company with negative cash flow investing activities?

    Negative cash flow from investing activities should be evaluated since it could be a warning sign. However, it can also mean ... Read Answer >>
Trading Center