Which type of capacity represents the actual output achievable under normal operating conditions?

Effective capacity refers to the maximum output that can be realistically achieved under normal operating conditions, accounting for potential delays, maintenance, and other operational constraints. This concept is crucial for planning and decision-making in operations management, as it provides a more realistic expectation of production capabilities than theoretical capacity, which represents the absolute maximum output without any interruptions.

In practice, effective capacity considers factors such as workforce availability, machine reliability, and material supply issues, all of which can affect the actual production levels. By focusing on effective capacity, managers can better align production planning with actual operational realities, leading to more efficient resource utilization and improved responsiveness to customer demand.