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Capacity of an Application Server 
SAP Web dispatcher needs information about the capacity of a server in order to balance its workload in relation to the other servers (see Load Balancing).
Each application server has a capacity value for
each of the services it provides (ABAP, J2EE). You can
display these values by choosing Goto ® Logon Data in the
Message Server
Monitor (transaction SMMS, or also in the
Web Interface of the
Message Server). The number
following DIA= or LB= is the capacity value for ABAP or J2EE.
In ABAP this number refers to the number
of configured dialog work processes. In J2EE the number refers to the number
of configured server nodes. In the standard setting Web Dispatcher takes the
maximum of both values to be the capacity of this application server.
If the server provides only ABAP or only
J2EE, Web dispatcher uses the respective capacity of each.

The capacity is used as an estimated value of the actual “power” of an application server. Depending on the application, the CPU number, tact frequency, cache sizes, or other properties are important here. As it is safe to assume that more dialog processes and server nodes are configured on more powerful machines, this number can be seen as an approximate benchmark. The "virtual load" (load factor, see Server Selection and SAP Web Dispatcher Load Balancing) is based on this static estimated value and for this reason is also only an approximate benchmark.
With a high workload the dynamic elements of load balancing (ping times, current number of open requests, and so on) indicate precisely what the actual load is, and therefore the static capacity value is not important.
You can see what capacity of SAP Web dispatcher is used for load balancing in the Web Administration Interface in the Capacity column under Monitor Server Groups. Here you can also overwrite the capacity value with the right mouse button. The changes are lost when SAP Web dispatcher is restarted.
You can overwrite the capacity value permanently by setting the profile parameter wdisp/server_<xx> in the profile of SAP Web Dispatcher. It has the following syntax:

wdisp/server_<xx>= NAME=<name>, LB=<capacity>, ACTIVE=<0|1>
whereby <name> is the name of the instance (not the host name) and <capacity> is the capacity value of this instance. <xx> are numbers ascending from 0 (compare with Generic Profile Parameters with the Ending <xx>). The ACTIVE option specifies whether the application server takes part in load balancing or not. If ACTIVE=0, the server does not get any requests at all. If the option is not set, the standard setting is for the server to take part in load balancing.

wdisp/server_0 = NAME=binmain_BIN_53, LB=123
wdisp/server_1 = NAME=myserv_1, LB=11

Normally, the capacity set by the system based on information from the message server is ideal for operation.