Which of the following describes a benefit of capacity planning?

Capacity planning is a critical process in supply chain management that enables organizations to determine the necessary resources needed to meet expected demand for products and services. The correct choice highlights how capacity planning assists in the effective allocation of resources. By anticipating the required capacity needed to meet future demand, businesses can ensure they have the right amount of equipment, workforce, and materials in place. This strategic foresight helps prevent shortages and excesses, ultimately leading to improved operational efficiency and customer satisfaction.

When businesses engage in capacity planning, they analyze historical data, market trends, and forecasted demand, allowing them to effectively allocate resources. This proactive approach minimizes waste, optimizes resource use, and helps organizations remain competitive in rapidly changing markets.

The other options do not capture the essence of capacity planning accurately. Maximizing underutilized resources does not reflect the primary goal of capacity planning; instead, it aims for optimal utilization. While demand forecasting may play a role in the process, minimizing its need is not a direct benefit of capacity planning; rather, accurate forecasting works alongside capacity planning. Finally, focusing solely on reducing production costs neglects the broader objective of capacity planning, which encompasses balancing cost control with the ability to meet demand efficiently.