The amount of products or services an organization can produce in a given time is known as capacity. Capacity is the maximum amount of output that a company can maintain in order to manufacture a product or provide a service.
Depending on the industry, capacity can refer to a manufacturing process, human resource allocation, technical thresholds, or a variety of output concepts. Capacity planning necessitates management's acceptance of production process constraints.
No system can operate at full capacity for an extended period of time; inefficiencies and delays make reaching a theoretical level of output in the long run impossible. Capacity assumes a constant maximum output level.
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