Determining the "right" level of capacity is one of the most strategic and difficult decisions managers face.

Question

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Determining the appropriate level of capacity is a strategic decision that has significant implications for a company's profitability and competitiveness. Managers must consider factors such as market demand, production costs, and future growth projections when deciding on the optimal level of capacity. This decision is not only difficult but also critical for the success of the organization.

Determining the "Right" Level of Capacity Is One of the Most