The ABC Cement Corporation produces a high-quality cement that is supplied to construction companies.The potential demand and the probability of each potential demand quantity are given for the upcoming year: Assuming manufacturing capacity of 700,000 tons,the estimated capacity cushion

Question

The ABC Cement Corporation produces a high-quality cement that is supplied to construction companies.The potential demand and the probability of each potential demand quantity are given for the upcoming year:  Assuming manufacturing capacity of 700,000 tons,the estimated capacity cushion

Quizplus · Accepted Answer

To find the cushion, first multiply the estimated demand levels by their probabilities and sum the products (150,000+100,000+90,000 = 340,000). 340,000 is the utilization level and 700,000 - 340,000 = 360,000 capacity cushion.

The ABC Cement Corporation Produces a High-Quality Cement That Is