The variability of demand will determine the amount of capacity cushion that is required.

Question

Quizplus · Accepted Answer

Capacity cushion refers to the level of additional capacity that is maintained above the expected demand level to handle unexpected changes in demand or other disruptions. The amount of capacity cushion needed will depend on the variability of demand, as higher variability will require a larger cushion to account for the uncertainty and ensure that customer orders can be fulfilled even during peak demand periods. Therefore, the given statement is true.

The Variability of Demand Will Determine the Amount of Capacity