What is the purpose of capacity planning in operations?

• A. Scheduling maintenance windows and downtime.
• B. Selecting supplier quality levels.
• C. Determining the production capacity needed to meet demand, balancing resources.
• D. Planning marketing promotions.

Answer: (C)

Capacity planning is about sizing the production capability to match forecasted demand while keeping resources in balance. It asks how much we need to produce and what constraints exist in labor, equipment, and facilities, then decides how to align those capacities with expected demand. The goal is to avoid underutilized or overstrained resources by planning the right mix of output, shifts, machines, and possibly outsourcing or investment in capacity.

For example, if demand is rising next quarter, capacity planning helps determine whether to add shifts, bring in extra equipment, or adjust the production schedule so we can meet orders without causing bottlenecks. This focus on matching future output to demand is why this option is the correct description.

Scheduling maintenance windows is about keeping equipment reliable, but not about sizing capacity. Selecting supplier quality levels deals with input quality and supplier management. Planning marketing promotions concerns creating demand rather than aligning capacity to it.