Aggregate Capacity Management

Aggregate capacity management represents a planning process meant to maximize a company's resources in the medium term. We can look at this concept by taking the term in reverse order, starting with "management."

Under this planning structure, a company looks to manage company resources in an effective way. The goal here isn't to plot out day-to-day operations in the immediate future, or to look far out into the horizon in order to make long-term strategic decisions.

Now let's look at the "capacity" part. The process targets getting the capabilities of the company's operations (its capacity to produce whatever it is that the company produces) in line with expected demand, at least as far as company executives can predict demand a few months or quarters down the road. Managers figure out how best to use the company's capacity in the near term.

And then the "aggregate" part of the equation tips a hat to the fact that we are looking at the company in total, or in aggregate. It's a general plan, taking the company's aggregate capacity into account while making management decisions. See? As in aggregate capacity management.