Question

How are capacity decisions made? No Bullet Point, Short Essay

Answer 1

It is important to find the determinants which are important to make capacity decisions, such as product, service and process factors, etc. Capacity decisions are important and have direct influence on the business units within an organization. It impacts the future demands in case it is not estimated correctly. The capacity decisions are made by assessing the existing capacity in an organization and understanding the business needs to forecast the long term capacity required to run the business operations successfully. It is also essential to determine different approaches to make changes in the capacity. When taking decisions at organizational level, it is required to evaluate the available alternatives for technological, economical and financial capacity. Therefore, while making capacity decisions, the alternatives chosen should be aligned with the organization strategic plan and mission.