Capacity requirements planning (CRP) is a methodology used to calculate the production capacity needed to meet planned and actual demand. CRP considers both current and projected demand to ensure that manufacturing capacity meets future needs. Manufacturers can avoid over- or under-producing goods by using CRP, leading to excess inventory or stockouts.
CRP is typically performed regularly to keep up with changes in demand. Many software applications exist to help with this process by automating data collection and analysis. Capacity planning is essential to effective production management and can help businesses remain agile and responsive to market conditions.
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