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Operations management for CMA inter group 2. Capacity refers to the maximum load and operpating unit can handle. Capacity planning is necessary when an organization decides to increase its production or introduce new products into the market. Capacity requirement planning is a technique which determines what equipment and Labour capacities are required to meet the production objectives. The question this video is having ,is to calculate the number of work stations required. For this first calculate the number of hours required , which includes process hours and set-up time hours. process hours = Annual demand * Process time in hous. set- time in hours = Number of set-ups * set-up time in hours. Now calculate available hours as : Number of shifts per day * Number of hours per shift * Number of days per week * Number of weeks per year * Utilisation. Number of work stations required = Hours required ÷ Hours available.