Capacity management is the act of ensuring that an organization fully maximizes its potential activities through production output (throughput) under all necessary conditions and continually. The capacity quantifies how a business can achieve production through a given period of time. Briefly, this paper analyses the need for an organization to measure the capacity of its various resources and the way this helps in organizational decision-making.
The importance of performance measurement system in an organization lies in the improvement of a company’s performance, business productivity through the reduction of costs. The process of measuring an organizational throughput leads to the comparison of actual performance with the standards of the business (Performance measurement, n.d) . This helps the management to understand the extent to which performance gets deviated from the expected measure. This, in turn, helps to take the necessary actions to bring the performance to uptime. Capacity management helps to align the activities with the plans established. Evaluating throughput provides necessary feedback in order to guide the activities to allow the managers to implement the best practices. Capacity management is a great way of understanding, managing and improving the overall functioning status of a business organization (Sabharwal & Wali, 2013) . If this is done effectively and efficiently, this can drive definite success in business.
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Capacity management capable of providing organizations with a comprehensive support system which comprises of detailed databases, measurement consolidation, automated procedures, control information of verifying plans, formal plans which offers a decision support system in order to help management in making the right decisions right on time. Realizing the throughput of the organization helps an organization to know what to do in order to bring a company downtime back to functionality by putting the necessary measures into place. (Kimchi, 2017) .
References
Kimchi, E. (2017). Capacity and Decision-Making. Oxford Medicine Online . doi:10.1093/med/9780199959549.003.0009
Sabharwal, N., & Wali, P. (2013). Capacity Management Design. Cloud Capacity Management , 71-78. doi:10.1007/978-1-4302-4924-5_8
Why is performance measurement important to the success of businesses? (n.d.). Retrieved from https://www.linkedin.com/pulse/why-performance-measurement-important-success-fareed
