CPIM Practice Exam

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Which of the following does NOT contribute to rated capacity?

Hours available
Efficiency
Market competition
Utilization

The correct answer is: Market competition

Rated capacity is a measure of the maximum output that a system can achieve under ideal conditions. It incorporates elements like hours available, efficiency, and utilization. Hours available refer to the total number of hours that a facility or machine can operate in a given period, which directly impacts the potential output. Efficiency reflects how well the production process converts input into output—higher efficiency means more output from the same input or resource. Utilization measures how much of the available capacity is being used—it's a way to assess whether capacity is being used effectively. Market competition, on the other hand, does not directly affect the rated capacity of a production system. While competition might influence operational decisions and strategies for maximizing output or efficiency, it's an external factor that affects demand rather than the inherent capabilities of the production system itself. Therefore, it does not contribute to the calculation of rated capacity, making it the correct answer to the question.