CAPACITY PLANNING - CHAPTER I Introduction Definition...

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CHAPTER I Introduction Definition Capacity planning is a key strategic component in designing the system. It encompasses many basic decisions with long-term consequences for the organization (Stevenson, 2012). It refers to an upper limit or ceiling on the load that an operating unit can handle. For a bank company, capacity would be the ability of a given system to handle the customer in their daily operation. Capacity planning is the process used to determine how much capacity is needed (and when) in order to manufacture greater product or begin production of a new product. Capacity planning is the first step when an organization decides to produce more of a new or existing product. Once capacity is evaluated and a need for new or expanded facilities is determined, facility location and process technology activities occur. Too much capacity would require exploring ways to reduce capacity, such as temporarily closing, selling, or consolidating that might involve relocation, combining of technologies, or a rearrangement of equipment and processes. The main idea of the capacity planning is how the bank handles their people in order to serve the customers and satisfy their wants and needs. The way banks plan for capacity will be critical to their future success. And the same applies to all sorts of organizations, and at all levels of these organizations. The key to efficiency and fast customer service in the service industry is the correct and dynamic matching of demand and capacity. Given the seasonality and unpredictability of the various types of banking services and transactions, this process may be difficult but not insurmountable. Rationale about the Topic The Philippines has a comprehensive banking system encompassing various types of banks, from large universal banks to small rural banks and even non-banks . Butuan City is the commercial, industrial, and administrative centre of Caraga its region, has more than 260 financial institutions operating in the city . Moreover, banking industry capacity planning is one of the factors that will affect their business operation. 1
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Capacity planning has seen an increased emphasis due to the financial benefits of the efficient use of capacity plans within material requirements planning systems and other information systems. Insufficient capacity can quickly lead to deteriorating delivery performance, unnecessarily increase work-in-process, and frustrate sales personnel and those in manufacturing. However, excess capacity can be costly and unnecessary. The inability to properly manage capacity can be a barrier to the achievement of maximum firm performance. In addition, capacity is an important factor in the organization's choice of technology. So the research is conducted to gather information, understand/analyze the data, how bank determines their capacity requirements and how the customers satisfied to the products and services to the said bank. The ultimate goal of capacity planning is to meet the current and future level of the requirement at a minimal wastage. Furthermore, the awareness of
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