Which one of the following statements about capacity cushion is best?
A) Return of investment is about the same for capital- intensive firms, regardless of their capacity cushions.
B) Large capacity cushions are more likely to be utilized when future demand is known.
C) Small cushions are used when the product mix often changes.
D) The best- sized cushion varies by industry and firm.

Question

Quizplus · Accepted Answer

The best-sized capacity cushion varies by industry and firm because different industries and firms have different levels of demand variability, cost structures, and strategic priorities, which influence their optimal capacity cushion size.

Which One of the Following Statements About Capacity Cushion Is