Responded to a post on a teachers' Economics/Business Studies discussion list concerning the definition of capacity. I responded as follows: The best place to get to grips with an understanding of the meaning of what you are calling Capacity in the context of business studies is a cost and management accounting book ... such as mine! Maximum capacity is, eg, 168 hours a week for every resource if a business works 24 hours a day, seven days a week. Of course, not all businesses do work 168 hours a week so their maximum capacity relates to their ordinary working week. Then we need to refine the definition, along the lines of ideal capacity practical capacity normal capacity expected capacity. ideal capacity is the absolute maximum and it is rarely attainable in the long run practical capacity takes a more realistic view of capacity by, eg, allowing for planned maintenance, machine setups, meal breaks, training time, waiting for materials, materials handling delays ... however, this view of capacity takes a high rate of productivity view of life in that it should assume an optimum level of production/utilisation time and minimum down time normal capacity is a variation on the practical capacity and allows for a less stringent view of down time: this is the level of capcity that will be assumed by cost accountants as they are compiling standards, working through budgets and so on expected capacity is the level of capacity takes an even more relaxed view than normal capacity and might take account of, eg, local conditions, union agreements, special allowances for employees with disabilities ... the best example of that to come out of the news over the last week is at Sunderland AFC where Niall Quinn admitted that former manager Peter Reid had allowed him to take life easier than new manager Howard Wilkinson will ... because of Quinn's bad back!! If you want to put percentages on all of this, for illustration only, we might find as follows: ideal capacity ... 100% practical capacity ... 95% normal capacity ... 93% expected capacity ... 90% DW