This unit defined different ways to measure capacity, set up maximum capacity, and calculate capacity utilization. The long-term and short-term strategies to ease the bottlenecks and the concept of theory of constraints are also discussed in this unit. After reading, one should be able to explain the reasons for economies and diseconomies of scale. The capacity cushions, timing and sizing options, and linkages with other decisions are discussed to help the future managers in the optimal decision making abilities. The waiting line models, simulations, and decision trees can further assist managers to take good decisions.