Systematic Approach to Capacity Decisions:

In general, a four step procedure is followed by the managers to make sound decisions. The most common supposition in this procedure is that the management has already performed the preliminary step of finding existing capacity. The four step procedure, which is generally utilized, is as follows:

1. Estimate future capacity requirements.

2. Find gaps by comparing the requirements with available capacity.

3. Build up alternate plans for filling the gaps.

4. Evaluate each alternative, qualitatively and quantitatively both, and make a final choice.