CPIM Practice Exam

The measurement of how effectively a work center uses its capacity is known as?

1. Efficiency

2. Productivity

3. Throughput

4. Capacity utilization

The correct answer is: Efficiency

The correct answer is associated with the concept of effectiveness in relation to a work center's capacity usage. Efficiency specifically measures how well a work center converts inputs into outputs, considering the work center's full potential. It essentially indicates how much of the available capacity is being utilized effectively without waste. While productivity generally refers to the ratio of output to input, it does not specifically measure the effectiveness concerning the work center's capacity. Throughput focuses on the rate of production or the amount passed through a process, which is slightly different from measuring capacity efficiency. Capacity utilization represents the percentage of total capacity being used but does not capture the effectiveness of that usage in terms of output or performance as comprehensively as efficiency does. Thus, the measurement that best captures how effectively a work center utilizes its capacity is efficiency.