Capacity planning is the process of estimating and allocating the required resources (such as CPU, memory, disk space, bandwidth, etc.) to meet the current and future demands of the information systems and applications. Capacity planning would prevent application failures arising from insufficient hardware resources, as it would ensure that the applications have enough resources to function properly and efficiently, and avoid performance degradation, errors, or crashes.
References = CISM Review Manual 2022, page 3081; CISM Exam Content Outline, Domain 4, Knowledge Statement 4.92; What is Capacity Planning? Definition and Examples