Spare Capacity
Unused production capacity available for growth.
Formula
Spare Capacity (%) = ((Maximum Capacity − Actual Output) ÷ Maximum Capacity) × 100
Real World
During the 2020 pandemic, Airbus had significant spare capacity as aircraft orders collapsed, yet still bore the fixed costs of its Toulouse factories — highlighting the financial burden of unused capacity.
Exam Focus
Always calculate spare capacity as a percentage and evaluate both the opportunity (flexibility) and the cost burden.
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