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Q. 5-6PE

Expert-verified
Found in: Page 128

### Operations And Supply Chain Management

Book edition 14th
Author(s) F. Robert Jacobs
Pages 800 pages
ISBN 9780078024023

# We have this when we have the ability to serve more customers than we expect to have to serve.

Capacity cushion

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## Capacity cushion

When the degree of additional capacity is added to the farming organization to maintain rapid increases in demand or unexpected reductions of manufacturing capacity is referred to as a capacity cushion.

## Example of capacity cushion

For instance, a 10% capacity cushion exists if a facility's projected monthly demand is $400,000 in items or services and it can generate up to$ 450,000.