what is capacity planning in operations management

Capacity planning in operations management is the process of balancing the demand for a product or service with an organizations ability to produce enough to meet that demand. It involves evaluating all available production resources, such as machinery, staffing, and work centers, to understand if the manufacturer will be able to meet customer demand now and in the future. This process includes estimating the number and type of resources required and the amount of time needed to complete the project. Capacity planning is crucial in ensuring that an organization has the necessary resources to meet its demand and can help avoid problems such as overproduction or underutilization of resources. It is a critical aspect of operations management as it helps determine what must be done to meet the demand for a product or service and sets up a company to grow while avoiding idle resources and underused capacity.