Production capacity refers to the maximum amount of goods or services that a company can produce in a given time period under normal conditions. It is influenced by various factors, including the availability of resources, technology, and workforce efficiency. Understanding production capacity helps businesses plan their operations and meet customer demand effectively. Measuring production capacity can involve assessing machinery output, labor hours, and material availability. Companies often use this information to optimize their processes, reduce costs, and improve overall productivity. By analyzing their production capacity, businesses can make informed decisions about scaling operations or investing in new technologies.