When demand is variable,capacity is usually chosen above the average (forecast)demand.The excess of capacity over the average demand is called capacity cushion or _______.

Question

Quizplus · Accepted Answer

Safety capacity is chosen to accommodate variable demand and ensure that the capacity is sufficient even in periods of unexpected high demand. The safety capacity provides a cushion that helps the organization to manage unexpected surges in demand without disrupting operations or affecting customer service levels.

When Demand Is Variable,capacity Is Usually Chosen Above the Average