Identification of the Factors Affecting Capacity Utilization of Metal and Engineering Works in Small and Medium Enterprises

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Addis Ababa University


Small and medium enterprises have been perceived as a dynamic force for sustainable economic growth because they play an important role in creating job opportunity for individuals graduated from a different sector, reducing poverty, enhancing technological innovation, and developing entrepreneurial skills. The general purpose of the study was to identify the factors affecting capacity utilization of metal and engineering work (MEW) in a small and medium enterprise (SME) in the case of Arada sub-city administration. The study determines factors affecting the capacity utilization of the case sector. Both Primary and secondary data were used for this study. Data were collected from 81 respondents of SMEs. The data collected were analyzed using appropriate descriptive statistics and linear multiple regression techniques. The data have been analyzed with the help of Statistical package for social science (SPSS). The findings of this thesis indicated that the significant factors impacting capacity utilization of the case sector are market demand, finical access, human resource, raw material good governess, innovation, and on job training. And also working on each significant factor in such a way to decrease their effect on capacity utilization helps the case sector to use their installed CU more intensively. The conceptual map also developed that helps the enterprise to use the installed capacity efficiently and effectively by improving the significant factors. And it‘s found that the proposed conceptual map will pose a positive change to the existing capacity utilization of those selected enterprises from the group discussion with the owner of the enterprise that are selected from the sample size.



Capacity utilization, Small and Medium enterprises (SMEs), metal and engineering sector, Conceptual map