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Business Management - Operations management strategies: capacity planning


Capacity planning

Capacity planning is concerned with determining the level of human
and other resources that will be necessary to meet the production targets
of the organisation. (Capacity planning is contingent upon the organisation
having forecast the future demand for the goods or services produced by
that organisation.) It is concerned with establishing the maximum output
capability of an organisation in a given time period.

There are several ways that organisations can increase capacity. These
include:

* creating additional shifts and hiring more employees, or outsourcing to contractors

* getting current staff to work overtime

* outsourcing to other organisations

* increasing plant and machinery

* building up inventory and taking back orders from customers

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