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Lack of knowledge.


Making assignments to a production unit or resource within a production unit that absorbs less than 100% of its capacity; that is, creating a capacity buffer. Underloading is necessary to accommodate variation in processing time or production rate, in order to assure plan reliability.

Underloading is also done to release time for workers to take part in training or learning, conducting first-run studies, implementing process improvements, or for equipment to be maintained.


The percentage of a resource’s capacity that is used in production.

Example 1: Because of time lost waiting for materials, our labor utilization last week was only 40%.

Example 2: We deliberately reduced next week’s planned labor utilization rate so crew members could attend a training course.