Which one of the following statements about capacity cushions is best?
A) Companies with flexible flow processes tend to have small capacity cushions.
B) Companies with high capital costs tend to have large capacity cushions.
C) Companies that have considerable customization tend to have larger capacity cushions.
D) Constant demand rates require larger-capacity cushions.

Question

Quizplus · Accepted Answer

Companies that have considerable customization tend to have larger capacity cushions as customization increases uncertainty and variability in demand, making it difficult to predict the level of demand and the appropriate level of capacity needed to fulfill it. A larger capacity cushion helps to provide a buffer against demand uncertainty. The other options are not necessarily true as capacity cushions depend on multiple factors such as demand variability, process flow, and production costs.

Which One of the Following Statements About Capacity Cushions Is