One of the steps for setting initial velocity is to assess the team's capacity, which is the amount of time available for the team to work on the backlog items. The team members assess their availability, acknowledging time off and other potential duties that may reduce their capacity, such as meetings, training, support, etc. The team then calculates their capacity by multiplying the number of team members by the number of hours per day by the number of days in the Iteration. The team's capacity is used as an input for estimating the initial velocity, which is the amount of work the team can complete in an Iteration. References: Exam Study Guide: SP (6.0) - SAFe Practitioner, Capacity Allocation, Velocity