CPIM Practice Exam

What is the primary goal of capacity planning?

1. The process of reducing costs in production

2. The determination of future production capacity needs

3. The development of new manufacturing technologies

4. The assessment of employee performance

The correct answer is: The determination of future production capacity needs

The primary goal of capacity planning is to determine future production capacity needs. This process involves analyzing current and anticipated demand for products and ensuring that the organization has the necessary resources, such as equipment, facilities, and workforce, to meet that demand. By accurately forecasting capacity requirements, businesses can avoid bottlenecks in production, optimize resource allocation, and ensure timely delivery to customers. Capacity planning also helps in making informed decisions regarding investments in new facilities or equipment, scheduling maintenance, and managing workforce levels, all of which are crucial for maintaining a competitive advantage in the market. It ensures that an organization is prepared to scale operations as necessary without incurring unnecessary excess costs or facing shortages that could impact service delivery.