Capacity Planning is to manage the changing demands of the service or product of the company. Amazon has a growing market since the company has a few big clients, which shows that there is a demand for the product on the whole. Amazon needs to determine the service level requirements to ensure the potential of the market and also identify the expectations of the customers.
If the company knows their market is going to increase with time and the service has potential then Amazon needs to manage its storage capacity likewise in order to meet the increasing demand. Some potential competitors like IBM etc might strike so the company must be prepared. On the basis of customer expectations the current capacity needs to be analyzed so that the changes can be made accordingly. On the basis of the analysis and the statistics the company can then plan for the future in order to ensure effective capacity planning. The clients of this service need to determine and analyze their needs and capacity according to which they can forecast their needs in the future. The companies can inform Amazon of their needs and help the company grow its infrastructure, which will eventually benefit the client companies. Hence it’s a team effort of the client and host company to ensure effective and efficient management (J. Dejun, G. Pierre and C.-H. Chi, 2009).
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