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Q. 5-6PE

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Operations And Supply Chain Management
Found in: Page 128
Operations And Supply Chain Management

Operations And Supply Chain Management

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

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Short Answer

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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Step by Step Solution

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.

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