Why is productive capacity analysis important?
When it comes to assessing a company's current situation, knowing how it operates is more than fundamental. In the industrial sector, for example, knowing how much a company can produce from a factory allows for better decision making. These include inventory sizing, production and storage costs reduction, better use of inputs and raw materials, and optimization of employees' work routines. In addition, the productive capacity indicator serves to dimension the supply to the market and to adjust the company's commercial and financial planning. Producing less can mean loss of customers, directly benefiting the competition. On the other hand, producing the most generates higher costs, harming the company's operating cash flow.