Logistics & Supply Chain

Basic

Capacity Utilisation

How fully productive capacity is being used.

Formula

U = \frac{output}{capacity} \times 100

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Variables

UUtilisation (%)

outputActual output

capacityMaximum capacity

Example

Output 800, capacity 1000: U = 80%

Did You Know?

Pushing utilisation above ~85% causes queue times to spike sharply — a core lesson of queuing theory.

logistics capacity utilisation

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Economic Order Quantity

Order size that minimises the combined cost of ordering and holding stock.

Reorder Point

Stock level that triggers a new order, covering demand during the lead time.

Safety Stock

Buffer inventory that absorbs demand variability during lead time.

Inventory Turnover

How many times inventory is sold and replaced in a period.

Days Inventory Outstanding

Average number of days stock sits before being sold.

Little's Law

Average items in a system equals arrival rate times average time in the system.