What is the main objective of capacity planning?

• A. To minimize supplier costs.
• B. To maximize marketing reach.
• C. To ensure capacity resources (labor, equipment, facilities) match demand.
• D. To forecast demand weeks in advance.

Answer: (C)

Matching capacity resources (labor, equipment, facilities) to demand is the main objective of capacity planning. The idea is to size and time the inputs needed to produce goods or services so that what the operation can deliver matches what customers will need, without too much idle capacity or too little capacity to meet demand. This involves forecasting demand, assessing how quickly capacity can be adjusted, and planning actions like hiring, purchasing equipment, expanding facilities, or using outsourcing to align the supply side with expected volumes. The goal is to maintain efficient use of resources while meeting service levels and lead times, minimizing costs from both overcapacity and undercapacity. Other options touch on different activities—minimizing supplier costs relates to procurement, marketing reach to demand generation, and forecasting demand is an input step rather than the objective of capacity planning itself.