| Best Operating Level | The level of capacity for which the process was designed and the volume of output at which average unit cost is minimized. |
| Capacity | The amount of output that a system is capable of achieving over a specific period of time. |
| Capacity Cushion | Capacity in excess of expected demand. |
| Capacity Focus | Can be operationalized through the plants within plants concept, where a plant has several suborganizations specialized for different products – even though they are under the same roof. This permits finding the best operating level for each suborganization. |
| Capacity Utilization Rate | Measures how close a firm is to its best operating level. |
| Economies of Scope | Exists when multiple products can be produced at a lower cost in combination than they can separately. |
| Learning Curve | A line displaying the relationship between unit production time and the cumulative number of units produced. |
| Strategic Capacity Planning | Determining the overall capacity level of capital-intensive resources that best supports the company’s long-range competitive strategy. |
