In economics literature , the notion of output - oriented plant capacity has been informally defined as " the maximum amount that can be produced per unit of time with existing plant and equipment , provided that the availability of variable factors of production is not restricted " ( Johansen ( 1968 , p. 362 ) ) . Färe et al . ( 1989a ) and Färe et al . ( 1989b ) published relevant articles and provided a formal definition according to a nonparametric frontier framework . Their measure of plant capacity utilization leverages data about observed inputs and outputs , using two output - oriented efficiency measures . Their work also prompted a series of empirical applications in diverse sectors , such as of fisheries ( e.g. , Felthoven , 2002;Tingley and Pascoe , 2005 ) and health care ( e.g. , Karagiannis , 2015;Magnussen and Rivers Mobley , 1999 ) ) , as well as banking ( Sahoo and Tone , 2009 ) and a macroeconomic application to trade barriers ( Badau , 2015 ) .