How do you calculate capacity demand gap?

Multiply output per cycle by available cycles for gross capacity, then multiply by uptime and first-pass yield. With 4 units/cycle over 480 cycles at 90% uptime and 97% yield, gross capacity of 1,920 units drops to 1,676 good units.

What is the difference between gross and good capacity?

Gross capacity assumes perfect running with no downtime or scrap. Good capacity discounts for real uptime and first-pass yield. In the example, that difference is 1,920 minus 1,676, or 244 units lost to downtime and scrap combined.

Why does first-pass yield matter for capacity?

Every reject consumes a cycle without producing a shippable unit. At 97% first-pass yield the example loses about 51.84 units to scrap alone, capacity that was paid for but cannot be sold.

What is a good uptime percentage?

World-class equipment availability often runs 90% or higher, though it varies by process. The 90% uptime in the example already removes 192 units of gross capacity, showing how even strong availability materially cuts output.

How do I close a capacity-demand gap?

Add cycles (overtime or shifts), lift uptime by cutting changeover and breakdown losses, or raise first-pass yield. Because losses compound, a few points of yield or uptime often recover more units than adding cycles.

Does this account for the bottleneck?

Only if you run it on the constraint resource. Deliverable capacity for the whole line is set by its slowest step, so apply this to the bottleneck for a meaningful commitment.

S&OP, Demand Planning & Forecasting calculator

Effective Capacity Calculator

Capacity-demand gap analysis converts nameplate throughput into the good units you can actually ship after downtime and scrap. Production planners and S&OP teams use it to test whether a work center can meet a demand plan before committing to it. The key insight is that gross capacity always overstates deliverable output, uptime and first-pass yield erode it. Sizing that erosion up front prevents over-promising to sales and customers.

What this calculator does

Estimate effective capacity for sandop, demand planning and forecasting using production-ready inputs so teams can confirm whether capacity can cover demand before committing the schedule.
Use it when capacity demand gap in s and op, demand planning and forecasting is being asked to take on more work and you need to know if there is room.
It multiplies output per cycle by available cycles for gross capacity, then discounts by uptime and first-pass yield to give good-unit capacity plus the downtime and yield losses.

Formula used

Gross capacity demand gap capacity = capacity demand gap output per cycle × available capacity demand gap cycles
Good capacity demand gap capacity = gross capacity × expected capacity demand gap uptime × expected capacity demand gap first-pass yield

Inputs explained

Good units produced per cycle:
Scheduled production cycles available:
Planned equipment uptime:
Expected first-pass yield:

How to use the result

Use it when comparing a work center's realistic output against a period demand plan, or when quoting a capacity commitment.
It uses single average uptime and yield figures, so it will not capture ramp effects, product-mix changes, or bottleneck shifts within the period.

Current U.S. benchmarks

The producer price index for steel mill products stands at 381.162 (BLS, Aug 2026), up 23.4% from a year earlier. Quotes priced off last quarter's material cost miss this move.
The U.S. has 3,569 primary metal manufacturing establishments employing about 354,911 workers (Census County Business Patterns, 2023).

Common questions

How do you calculate capacity demand gap? Multiply output per cycle by available cycles for gross capacity, then multiply by uptime and first-pass yield. With 4 units/cycle over 480 cycles at 90% uptime and 97% yield, gross capacity of 1,920 units drops to 1,676 good units.
What is the difference between gross and good capacity? Gross capacity assumes perfect running with no downtime or scrap. Good capacity discounts for real uptime and first-pass yield. In the example, that difference is 1,920 minus 1,676, or 244 units lost to downtime and scrap combined.
Why does first-pass yield matter for capacity? Every reject consumes a cycle without producing a shippable unit. At 97% first-pass yield the example loses about 51.84 units to scrap alone, capacity that was paid for but cannot be sold.
What is a good uptime percentage? World-class equipment availability often runs 90% or higher, though it varies by process. The 90% uptime in the example already removes 192 units of gross capacity, showing how even strong availability materially cuts output.
How do I close a capacity-demand gap? Add cycles (overtime or shifts), lift uptime by cutting changeover and breakdown losses, or raise first-pass yield. Because losses compound, a few points of yield or uptime often recover more units than adding cycles.
Does this account for the bottleneck? Only if you run it on the constraint resource. Deliverable capacity for the whole line is set by its slowest step, so apply this to the bottleneck for a meaningful commitment.

Related guides

Last reviewed 2026-08-12.