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Capacity planning involves determining the production capacity needed to meet current and future demand. Balancing a multi-product factory requires careful consideration of production scheduling to optimize resource utilization while ensuring timely delivery of all products. Factors favoring overcapacity include uncertain demand forecasts, the need for flexibility to adapt to market changes, and a desire to provide quick lead times. Under-capacity can be influenced by cost constraints, a desire to reduce inventory levels, and a focus on maximizing efficiency rather than flexibility.

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