What is theoretical capacity? (From Production point of view)

The capacity is the maximum output that allow using of all resources of processing machines or input factors in the operation .

Theoretical Capacity (from the production point of view):  is the maximum production output quantities, that can be generated or produced by using the full power of all concerned production's factors. 

The theoretical capacity is the optimum level of production with the maximum output of its equipment regardless the breaking down times of the machines. It's just a theoretical estimated production capacity but not a real production capacity. 

The maximum output capability, allowing no adjustments for preventive maintenance, unplanned downtime, shutdown, etc.

Theoretical capacity means maximum utilization of production capacity (without loss)

Theoretical capacity or ideal capacity.The theoretical capacity or ideal capacity is not realistic due to repairs, maintenance, setups, and other factors that will result in down time.

Theoretical capacity assumes that nothing in your production ever goes wrong. Accountants describe this capacity as working at full efficiency all the time. Theoretical capacity is also referred to as ideal capacity. Theoretical capacity is the level of a manufacturer's production that would be attained if all of its equipment and operations performed continuously at their optimum efficiency.

Consider what your pie-in-the-sky or perfect-world capacity would be. It’s a world in which everything runs perfectly and no machines or equipment ever break down. It’s utopia where no worker ever makes a mistake. That would be great, wouldn’t it? That’s theoretical capacity, and you can’t reach it. It seems silly, but you need to see this level of capacity to understand the others.

Say you own a business that makes athletic running shorts and other clothing. At maximum capacity, you can make 200 pairs of shorts per shift. You run three 8-hour shifts per day, 365 days a year. Based on those numbers, here is your theoretical capacity:

Theoretical capacity = shorts x shifts x 365 days

Theoretical capacity = 200 x 3 x 365 days

Theoretical capacity = 219,000

Theoretical capacity is ideal capacity which assume that nothing can stop production even maintenance of equipment .

Production is any process or procedure is designed to transform a set of input elements to a specific set of output elements. The management of this multilateral process is intended production management term Production management and if the production systems facilitate consumer daily goods and services in wide limits, the management of these systems is one of the most important players in the access to the best of this production output, and improve the economic and social development.

    The argument accepted in the world, in general, is that the limited resources in every community of the needs of limited Evger. Capable management is working to satisfy possible needs through these resources are more limited, ie, that the adequacy of the administration recognized when the administration accomplish what is required of them to use as little as possible of the factors of production, or until done the maximum possible production using elements of limited production . From this angle we can say that management is responsible for the target production quality and quantity and timing through the use of factors of production (input) in specific proportions make the production cost as little as possible.

    And it expresses what has been written about the production of the two concepts relate to production management. The first concept is noteworthy that the production means something material manufactured using the workers, materials and equipment. This concept is limited to the production of material goods only, such as: clothes, food, houses, and buildings of all kinds, cars, airplanes, televisions, and other home appliances, and the like.

    This does not include the concept of events that do not include production and material covered by the term services, such as education, medical service, entertainment, and homeland security.

    The second concept goes into production that does not mean material things, but also means the services, and production in the field of services is to accomplish its job benefit.

    The first concept is the traditional concept of common use yet. And who take it are still using to explain the management of this event expression «production management.» The second concept is a new and expanded concept propagated by the nay-sayers on the grounds that the basic principles that govern physical production is valid for the rule of service production principles. And they used them to explain the management of this event operations management operations management expression rather than the management of production in order to distinguish this new concept of the first concept.

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Theoretical capacity is the level of a manufacturer's production that would be attained if all of its equipment and operations performed continuously at their optimum efficiency. Theoretical capacity is also referred to as ideal capacity.