Seasonality Capacity Planner
Decide between flexing up temporary capacity for a peak season or building fixed capacity year-round, on total annual cost, not per-unit rate alone.
Strategy costs
Continue Analysis
Based on your results, these related decisions are available.
How this works
Flex/temp capacity typically costs more per unit-month than permanent capacity, but is only paid for the months it actually runs. Fixed capacity costs less per unit-month but runs all 12 months whether needed or not. Comparing the two strategies correctly means multiplying each rate by its actual duration, not just comparing the per-unit rates.
Key terms
- Peak gap: the shortfall between peak-month demand and base capacity that needs covering.
- Flex capacity: temporary capacity added only during the peak months.
Assumptions
- Uniform peak level for the stated number of months, base level the rest of the year
- No mid-season ramp-up or ramp-down cost
Limitations
- Does not model a multi-tier or gradually ramping seasonal curve
Sources
Standard capacity-strategy (make-or-flex) cost tradeoff framing.
Worked example
A 500-unit peak gap over a 3-month peak season costs $10,500 to flex at $7/unit-month, but $30,000 to cover with fixed capacity at $5/unit-month carried across all 12 months. Even though the fixed rate is lower per unit, the short 3-month duration makes flex the cheaper choice overall.
Common use cases
- Deciding whether to hire seasonal temp staff or expand permanent headcount
- Choosing between renting extra equipment for a season or buying it outright
- Sizing a warehouse or line for peak versus flexing overflow capacity