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    • It can enable it to meet the level of demand for a product.
    • Efficient capacity management can ensure that a firm is not spending too much on capital equipment and other resources.
    • Some industries have seasonal production. So they need to make sure they have the capacity to cope with peak production.
      • also seasonal demand- need to plan capacity.
    • If a firm has no competition, a lack of capacity may not be an issue, as they won't find alternative suppliers.
      • If in a competitve environment, the business may use outsourcing or sub-contracting.


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