Ramp-up is a term used in
economics and
business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for pr ...
to describe an increase in a firm's production ahead of anticipated increases in product demand. Alternatively, ramp-up describes the period from completed initial product development to maximum
capacity utilization
Capacity utilization or capacity utilisation is the extent to which a firm or nation employs its installed productive capacity. It is the relationship between output that ''is'' produced with the installed equipment, and the potential output whic ...
, characterized by product and process experimentation and improvements.
Ramp-up in the first sense often occurs when a company strikes a deal with a
distributor,
retailer, or producer, which will substantially increase product demand. For example, in June, 2008, after launching a joint venture with
Guangzhou Automobile,
Toyota announced that it would "ramp up" production in
China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
to meet expected increases in market demand by constructing a plant in
Guangdong, which would produce some 120,000 additional
Camry sedans. In the consumer
electronics industry
The electronics industry is the economic sector that produces electronic devices. It emerged in the 20th century and is today one of the largest global industries. Contemporary society uses a vast array of electronic devices built-in automated or ...
, manufacturers often ramp-up production in the early fall to meet demand during the holiday selling season.
As ramp-up is typical in early stages of firm or market development, the term and process is widely associated with
venture capital, which seek to rapidly increase rate of
return on investment, just prior to
exit. For example,
Wrightspeed, the producer of the X1 electric car prototype, began to seek out capital in order to hire on 50 well-trained employees in order to "ramp up" production in anticipation of sales successes.
Ramp up may also refer to how quickly
dispatchable generation from power plants can increase, and ramp down by how quickly it can decrease whilst still remaining operational (not shutting down), with "ramp" being either way.
References
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Business terms
Production economics