Capacity Management Business Processes

Abstract

The company is always aware of what it wants to produce because it is definedby the market pressures or by demand. However, what the company wants tomake must be rationalised against what it can make. The issue of balancebetween requirements and capacity relates to a type of trade off. On one hand,the company wants to satisfy demand, but on the other hand, it may not havethe capital resources to do so. At the senior management strategic planninglevel, long-range investment decisions are made that can increase the company’scapacity resources. Commonly however, the additional capacity lags behindthe pressure to produce more product more quickly. In these cases, manage-ment must make choices. A company must select carefully how to manage itslimited asset of resources to achieve the greatest benefit to the company.