Question: Utilization looks at the current capacity that is used by the company in its daily operation and it is compared to the design capacity. For

Utilization looks at the current capacity that is used by the company in its daily operation and it is compared to the design capacity. For instance, if the design was 50,000 units a day but the company only produced 10,000 units a day, then the utilization would be as follows: 10,000/50,000*100%= 20%. Efficiency is measured by determining the resources they are used in production if it's compared to the desired standard of the resources that are needed to be for. An example of basic units is producing 2 tons of peanuts and it uses energy amounting to $2,000 but the company uses 1,900,000 the this would show a production process is highly efficient.

Please explain your efficiency example regarding peanut production. Please calculate the efficiency number using the data you presented. It seems as though there needs to be another cost of energy that is not posted. (This statement is from the professor). Please tell me what I missed or the step the teacher speaking of.

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