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Capacity
Capacity is a measurement used to describe how many goods or services can be produced within a given time period. A company which cannot produce all that is required within a given time period is known to be capacity constrained, and must defer production until capacity becomes available. Inventory acts as a form of stored capacity, as holding inventory can allow a company to sell more than it produces within a time period. There is usually a tradeoff between holding excess capacity, holding inventory, and not meeting all customer demand.