This chapter considers medium-term capacity issues. These are concerned mainly with ensuring that sufficient capacity of the right type is available at the right time, to meet demand for the planning period. Measuring capacity may seem straightforward at first, especially when compared to the uncertainty inherent in estimating demand. Measuring capacity in services is a particular challenge. The design capacity of an operation represents the theoretical output of a process as it was designed. However, this level of capacity is rarely met, due to occurrences that prevent the operation producing its full output. The capacity remaining after a loss of output due to planned factors is called the effective capacity of the process. Methods for reconciling capacity and demand can be classified into three ‘pure’ strategies: level capacity, chase demand and demand management. The level capacity strategy sets the processing capacity at a uniform level throughout the planning period, regardless of fluctuations in forecast demand.