Question

How could the use of capacity control manage rivalry and increase profitability?

Answer 1

Answer- Capacity control is the setting up of effective capacity of the required operation so that it can respond to the demands placed upon it. It is basically deciding how the operation should react to the fluctuations in demand.

1. Capacity control allows the organization to react as per the fluctuations in the demand which in turn gives a competitive advantage over the competitors as the organization can more easily change/modify it's production.

2. Capacity control allows the organization to be efficient and effective, by adjusting their processes as per the demand. It allows minimum input wastage and maximum output which improves the profitability ratio (output÷input). Thus capacity control increase the profitability by making the organization efficient and effective (reacting as per the demand of the customers)