Capacity Utilisation

Capacity utilisation within a business can be easy or hard to calculate, for a printing shop, it is easy to calculate how many sheets they can produce per hour for example and in a metal fabricators, it is easy to calculate how many sheets of metal they can produce per hour, however for a company that has varied demand, it can be very hard to predict how much the business should utilise its capacity, a clearly noticeable example would be an understaffed restaurant, although they have staff working the shift, it is clear that they did not account for the demand that the customers require.

Capacity Utilisation = Actual level of output / Maximum possible output x 100

Productivity = Total output / Number of workers

Capacity utilisation should never be at 100%, as this could mean that if something were to fail, the business may not be able to fulfil the orders, Companies may choose to ask multiple ‘what if?’ questions that may indicate if the business may want to reconsider its utilisation levels.

  • What if the employment rate fell?
  • What if workers were too highly skilled?
  • What if forecasts are not conservative?
  • What if costs increased?
  • What if minimum wage increased further?

The Impact on EU Trade Imports and Exports vs Capacity Utilisation

For UK Businesses, there is a handy acronym when working with exchange rates, SPICED. ‘ strong pound imports cheap, exports dear ‘. This applies to any companies in the UK who may wish to export or import goods from elsewhere.

If the UK were to leave the EU, the cost of imports/exports could be greater/lesser depending on the trade deals we could secure with countries.

  • Specialised workers would find it harder to move freely into the UK.
  • Tariffs are not imposed in the EU, tariffs could cost businesses money, however it could be argued that they increase competition.
  • The Common Market could potentially be lost.
  • The work ethic of some foreign national employees could change.

These factors could all affect the overall capacity utilisation of UK companies.


Common AS-Level Business Studies Equations

Here is a list of routinely forgotten equations for Business Studies, make sure to memorise them.


Total Contribution =

Total revenue - Total variable cost

Contribution per unit =

Selling price per unit - Variable cost per unit

or (for total contribution)

Contribution per unit x Number of units sold

Profit =

Total contribution - Fixed cost

Break-even Output =

Fixed cost / Contribution per unit

What do they mean?

  • Contribution is useful for a business to be responsible for a range of products, it allows them to calculate how much money they make on a sale.
  • The Break-even charts (and equation) is a tool that allows you to show total costs at all possible levels of output or demand from zero to maximum capacity. Break-even is not given in money, and should be the amount of units sold.
  • Profit is money made, not taking anything into account other than fixed and variable cost.
  • Contribution per unit, is just total contribution per unit. So to get it, divide by the amount you sell of a product (or use the other formula). Don’t confuse this with break-even.

When calculating using these equations it is important to consider external factors. Such as extrapolation or economic variables that could be changing the data. However you may not get questions like this in the exam.

Sometimes four mark questions may ask about productivity. For example, these questions do not want you to describe the formula, they may want you to state it. But make sure to stick to the ‘because, leading to, therefore and such as’ structure. Otherwise you may not be answering the question correctly.

Break-even output is easier to consider it as the fixed costs divided by the contribution per unit, like so. If it costs $500 in rent, and you get $1 for every candy bar you sell, you need to sell 500 candy bars. Because $500 / $1 is 500 not $500.

Remember that break-even output is never given as money. Remember also to consider confidence intervals may mean that the data given is not accurate, as well as the accuracy of the data you have received.

comments hear-say equations Remember that the information you have may be hear-say and not 100% accurate, things may change. The variable cost of items may raise, or lower. Total contribution may not be accurate if the business sells multiple products at different prices. Make sure to base your equations off all of the information available, don’t take short-cuts.

"Revenue is vanity, Profit is sanity, Cash is King!"

Remember, its not percentages or ratios that businesses put in the bank, it’s dollars. credit. So think about how valuable the data you have actually is. Make sure you understand the numbers! cash flow shortages can be negated with better trade terms. Having predictable cash flow is preferable, so make sure that you mention it.

Bukkit has been given a DMCA takedown by Wesley Wolfie. The NEXT steps.

It is currently well known that bukkit has been given a dmca request by Wesley Wolfie, but now that that has happened, we now need to rebuild!

So here is whats happening, the folks over from bukkit are now working on a new modding api, called sponge! currently ‘Sponge will start with Minecraft 1.8, with Vanilla Client Support on Forge.’

Old plugins that were written on bukkit will most likely have to be removed, unless someone finds a way to make them compatible with sponge.

Here is a large extract of what they plan to do.

Our ultimate goal is to create a modding API that is easy to use for owners of small servers for friends and family, owners of large servers, and everyone in between. In addition, we also plan to permit client modding.

  • Sponge mods should work across several different Minecraft versions without needing an update from the developer, which means that you don’t have to worry about all your mods breaking between each new major release of Minecraft (1.6, 1.7, 1.8, etc.).
  • Sponge will support official interoperability with Forge so you can use both Sponge mods and Forge mods together. We are working directly with the Forge team.
  • While Sponge will not be directly supporting Bukkit, community projects have been started that aim to provide complete support for existing Bukkit plugins on top of Sponge

the whole plan can be found here


Good Luck to you all


EDIT, also check out PROJECT RAINBOW, they currently have downloads and plugins up for grabs.