What does capacity measure in an organization?

Capacity in an organization specifically measures the maximum output of goods that can be produced over a certain time period under normal working conditions. It reflects the upper limit of production capabilities, which can be influenced by various factors such as machinery, workforce, and operational processes. Understanding capacity is vital for planning production levels, managing supply chain efficiency, and meeting customer demand without overextending resources.

While other options touch on relevant aspects of operations, they do not encapsulate the primary definition of capacity. For example, the average time taken to fulfill an order relates more to lead time and responsiveness rather than the maximum production capability. The amount of resources available pertains to inputs rather than output, and the efficiency of the production process is more about how well resources are used rather than the total output they can generate. Therefore, focusing on maximum output captures the essence of what capacity measures in the context of operations and supply chain management.