Which statement describes capacity planning?

Which statement describes capacity planning?

• A. To minimize the number of suppliers in the network.
• B. To adjust workforce schedules to match short-term demand fluctuations.
• C. To determine the maximum output achievable with existing resources and align it with demand forecasts.
• D. To optimize last-mile delivery routes.

Answer: (C)

Capacity planning focuses on determining how much you can produce with the resources you have and lining that up with expected demand. It asks what the maximum output the current system can deliver is, considering facilities, equipment, labor, and processes, and then compares that capacity to demand forecasts to decide if adjustments are needed. If demand forecast is higher than what you can output, you plan actions to increase capacity or align the plan accordingly; if capacity exceeds forecast, you may scale back or repurpose capacity. The other options touch on different areas: reducing the number of suppliers relates to network or procurement strategy; adjusting workforce schedules for short-term demand is more about immediate or tactical labor planning; and optimizing last-mile delivery routes deals with distribution and logistics routing rather than capacity planning.

Capacity planning focuses on determining how much you can produce with the resources you have and lining that up with expected demand. It asks what the maximum output the current system can deliver is, considering facilities, equipment, labor, and processes, and then compares that capacity to demand forecasts to decide if adjustments are needed. If demand forecast is higher than what you can output, you plan actions to increase capacity or align the plan accordingly; if capacity exceeds forecast, you may scale back or repurpose capacity.

The other options touch on different areas: reducing the number of suppliers relates to network or procurement strategy; adjusting workforce schedules for short-term demand is more about immediate or tactical labor planning; and optimizing last-mile delivery routes deals with distribution and logistics routing rather than capacity planning.