Tools for Capacity Planning:

Long term capacity planning needs demand forecast for an extended period of time. Unluckily, forecast accuracy declines as the forecasting horizon lengthens. Moreover, the action of competitors enhances uncertainty in demand forecasts. The demand during any point of time is not evenly distributed. Peaks and valleys of demand can occur within the time period. For these reasons the capacity cushions are generally utilized. In this section, generally three tools that deal more efficiently with demand uncertainty and variability are described. These three models are as follows:

1. Waiting Line Models

2. Simulations

3. Decision Trees