Barry Butler is the dean of the Engineering School at State University. Barry’s data indicate that the Bio-Mechanical Engineering Department offers six elective classes using two faculty. (The standard load is three sections per academic year per faculty person.) The department offers these classes in 35-seat classrooms, as smaller classrooms do not contain the required equipment. The department, however, has only 20 students; all of them take all six elective classes. No other students take these specialized elective classes. Estimating the cost of a faculty person at $125,000 per year and capacity utilization at 58% (= 20 students/35 seats), Barry estimates the cost of the unused capacity at $105,000. (Barry multiplies $125,000 per faculty person × 2 faculty persons × (1 - 0.58) = cost of unused capacity). He informs the department chair that she must decrease this waste of valuable resources or risk being closed down.

Required:
Focusing just on elective classes, is Barry correct in asserting that the Bio Mechanical Department is not fully utilizing its capacity? What is the capacity resource in this setting, and what is the right measure of capacity utilization?