Abstract :
ABSTRACT: Capacity Utilization is the extent to which an enterprise or a nation actually uses its installed capacity. It is the relationship between output that is actually produced with installed equipment and potential output which could be produced with it, if capacity was fully used. Capacity Utilization is a key factor for the public sector companies especially in manufacturing industry. It’s linked to price variation branching from corresponding supply catering to the demand of the product/ services. It is one of their main objectives in support to providing important products/ services to the public and creating conditions for ec onomic progress and cohesion. On other hand profitability is the ability of a business to earn a profit. A profit is what is left of the revenue a business generates after it pays all expenses directly related to the generation of the revenue, such as producing a product, and other expenses related to the conduct of the business activities. Capacity Utilisation acts as a Magic Wand for manufacturing Public Sector Undertaking/Emterprise as it is directly related to the profitability of the Enterprise. It creates Magic spell by way of being directly proportional to profitability. This paper aims to focus to measure the basic relation between Capacity Utilization and the profitability in a profit-making public sector companies specifically in manufacturing industry. The purpose is to tap the gap along with the measures of improving efficiency both technical & allocative
Keyword :
Capacity Utilization; Manufacturing PSU; Profitability; Technical Efficiency; Allocative Efficiency