Dr Thomas Joseph discusses some key concepts about Capacity planning and Location Analysis. Capacity planning is the process of establishing the output rate that can be achieved by a facility. When discussing the capacity of a facility, there are two types of important information to consider: the amount of available capacity and the effectiveness of capacity use. Facility location is important because of the long-term commitments in buildings and facilities and the sizable financial investment that can have a large impact on operating costs and revenues.