Certified Supply Chain Professional (CSCP) Practice Exam

What is the primary focus of capacity management?

1. Maximizing the amount of inventory held

2. Ensuring sales meet forecasted demands

3. Establishing, monitoring, and adjusting capacity levels

4. Tracking transportation costs

The correct answer is: Establishing, monitoring, and adjusting capacity levels

The primary focus of capacity management is establishing, monitoring, and adjusting capacity levels. This involves ensuring that an organization has the appropriate resources and capabilities in place to meet current and future demands efficiently. Capacity management assesses the production capabilities of an organization and seeks to align them with demand forecasts to avoid under- or over-utilization of resources. Effective capacity management incorporates analyzing existing production capacity, forecasting future demands, and adjusting the capacity of facilities, equipment, and workforce as needed. This process ensures optimal performance without incurring excessive costs, and it plays a crucial role in maintaining a balance between supply and demand. By continuously monitoring these capacity levels, organizations can make informed decisions about scaling operations up or down based on market needs. Other options might focus on related aspects of supply chain management—for example, inventory management or sales forecasting—but they do not encapsulate the core essence of capacity management, which is centered on the proactive adjustment of capacity to enhance operational efficiency and responsiveness to market conditions.