SURNAME 1Student nameModulatorInstitutionDateCapacity PlanningCapacity planning is among the main aspects of operations management since it determinesthe number of services and goods that can be produced in a given period. Extremely low capacityshows that clients will not be satisfied while on the other hand very high capacity can affectprofitability and breakeven and lead to high fixed cost (Beckers 43). For a company to decide onincreasing its capacity, it has several options to put into consideration starting from constructing anew plant or facility or working overtime. Forecasting demand is very important incapacityplanning. Companies should employ different principles and strategies of capacity planning toensure that operations are within their budget and customers are satisfied. Whether a company isservice-based or product-based, it needs to adopt short-term capacity planning particularly whenthere are seasonal demands. Season demands are completely unpredictable and it is almostimpossible for a company to have a plan in place to meet them. Momentary plans such assubcontracting and employee overtime ought to be considered and the less costly ones have to beselected and implemented (Hill 158). This paper will develop a capacity analysis by applying theprinciples of capacity management and illustrate the impact of forecasting.In a company, several business components can present problems. These components mayinclude customer service, uncertainty about ...
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