#capacity utilization rate

There are many strategies and ways to increase production capacity. But it is very important to choose the optimal way. Inadequate capacity can lose customers and limit growth. Excess capacity can drain a company's resources and prevent investment in more lucrative tures. When to increase capacity and how much to increase it are critical decisions. So in this study we will intend to investigate the role of production capacity in operation management. Then we will define the optimal way to increasing production capacity of Ulaanbaatar mayonnaise factory in Mongolia. We used secondary data. In this study's informations about production capacity from the reference books, other research papers. And then information about the company's operation comes from Ulaanbaatar mayonnaise factory's annual production report, official website. Other useful information from the report of National Statistics Office of Mongolia and official website of Mongolian customs. Our main technique of analysis is Decision tree analysis. It is necessary to compare the financial benefits of ways to increasing production capacity and select the optimal way to increase production capacity in Ulaanbaatar mayonnaise factory of Mongolia. Also we used Microsoft Excel software to calculate the production capacities. Our expected result is how company can increase the market share by choosing the optimal way to increase production capacity also how the use production capacity as a competitive weapon and how they can produce product that exceed customer expectations by increasing capacity.