Which one of the following statements concerning capacity cushions is best?
A) Large capacity cushions are used more often when future demand is level and known.
B) Small capacity cushions are preferred in capital intensive firms.
C) Capacity cushions are used primarily in manufacturing organizations, not in service organizations.
D) Small cushions are used in organizations where the products and services produced often change.

Question

Quizplus · Accepted Answer

Small capacity cushions are preferred in capital intensive firms because these firms have high fixed costs and aim to maximize utilization to spread these costs over as many units as possible.

Which One of the Following Statements Concerning Capacity Cushions Is