Capacity is defined as the maximum amount or number that can be accommodated. We could consider capacity to be a speed limit, but It is a stretch to relate capacity to our automobile example. So, we will jump right to how it relates to Velocity in terms of points per iteration. Our main use of capacity is to determine, before an iteration begins, the maximum number of points a team can achieve during an iteration. So, it used as the cap for the amount of work to be planned for an iteration.
Now how do we determine the capacity? There are two major factors involved in determining the capacity: velocity and the iteration team. Generally speaking, the capacity should not exceed the velocity unless there are extenuating circumstances. Most of the extenuating circumstances are related to the iteration team. So, to calculate the team capacity factor we take the number of developers/testers on the team, multiply by the average number of points completed by 1 team member in a workday, and multiply that by the number of workdays in an iteration. For example: if there are 5 developers/testers on a team, the average number of points this team completes per workday is 2, and there are 8 workdays in a two-week iteration, then the iteration team capacity = 5 x 2 x 8 which is 80 points.
So, if there is no change in the iteration team capacity from the previous iteration, and the velocity is equal to or less than the iteration team capacity, the capacity number used for planning should be equal to the velocity. If there are changes in the iteration capacity number those changes need to be taken into consideration when setting the capacity used for planning. It ends up being less than or more than the Velocity depending on the changes in the iteration team capacity. Next, we will talk about how to use load and capacity when planning the work to be done in the iteration.
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