CPIM Practice Exam

What is the rated capacity of a work center given available time of 320 hours, utilization of 80 percent, and efficiency of 90 percent?

1. 230 standard hours

2. 230 actual hours

3. 444 standard hours

4. 444 actual hours

The correct answer is: 230 standard hours

To determine the rated capacity of a work center, the formula used is: Rated Capacity = Available Time × Utilization × Efficiency. In this scenario, the available time is 320 hours, the utilization is 80 percent (or 0.80 when expressed as a decimal), and the efficiency is 90 percent (or 0.90 as a decimal). Calculating the rated capacity involves substituting the given values into the formula: Rated Capacity = 320 hours × 0.80 × 0.90. First, calculate the effective available time taking into account utilization: 320 hours × 0.80 = 256 hours. Next, incorporate the efficiency: 256 hours × 0.90 = 230.4 hours. Since capacity is generally expressed in whole numbers, we round 230.4 hours down to 230 hours. It's essential to recognize that this figure represents the rated capacity in standard hours due to the stated utilization and efficiency, which are applied to the available time to reflect how much work can be accurately completed during the given hours. Understanding this calculation clarifies why the answer is 230 standard hours. The other options, including actual hours and other numerical values, do not directly reflect the combination of availability,