Capacity refers to the maximum amount of goods or services that a company can produce, store, or transport within a specific period under normal conditions.

‍

Capacity encompasses both physical and operational limits, determining how much output can be achieved given the available resources, including equipment, labor, and facilities. Understanding capacity is crucial for businesses to meet demand effectively while minimizing costs and maximizing efficiency. By optimizing capacity, companies can ensure that they are neither overproducing nor underutilizing their resources, leading to better financial performance.

‍

Capacity works by evaluating the limits of your production capabilities, helping you align resources with customer demand effectively. By understanding and optimizing your capacity, you can improve efficiency, reduce operational costs, and enhance customer satisfaction. This strategic approach not only boosts profitability but also positions your company for sustainable growth in a competitive marketplace.

‍