Companies may provide for extra capacity in anticipation of future increases in demand for their products or services.Such extra capacity is called ______.

Question

Quizplus · Accepted Answer

The term "capacity cushion" refers to the extra capacity that a company may have to meet future demand for their products or services. This extra capacity can be used to meet unexpected peaks in demand or to allow for future growth. Option B, overproduction capability, may refer to a similar concept, but it suggests a focus on producing more than necessary, which could lead to waste. Option C, waste, refers to resources or materials that are not used efficiently or effectively. Option D, flexible capacity, may refer to the ability of a company to adjust their capacity in response to changes in demand, but it does not necessarily imply a buffer or cushion for future growth.

Companies May Provide for Extra Capacity in Anticipation of Future