In the context of SAMPADA, what does capacity utilization measure?

• A. The total number of employees only.
• B. The amount of waste generated.
• C. The extent to which production capacity is being used compared to maximum possible output.
• D. The number of new machines purchased.

Answer: (C)

Capacity utilization measures how much of the plant’s production capacity is actually being used relative to the maximum output it could achieve. It’s typically calculated as actual output divided by the designed (maximum) capacity, often shown as a percentage. In the SAMPADA context, this tells you how efficiently agro-processing facilities are turning their installed capacity into real production, reflecting factors like demand, downtime, and operating efficiency. It isn’t about how many employees you have, the amount of waste, or how many new machines were purchased. Those aspects relate to workforce, waste management, or capital investments, not the level of capacity being utilized.