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Team velocity forcast increases when removing capacity of the team

Hi All, I seem to have a problem or found a bug. It seems that if I increase my team's capacity with more hours my forecasted velocity reduces and if I decrease (take developers out) my velocity forecast increase. This is like saying, if I add more people I can get less done and if I remove people/hours I can get more done.

Anyone else have this issue. Is there a solution?

Cheers, 

David

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