If the best operating level of a piece of equipment is at a rate of 400 units per hour and the actual output during an hour is 300 units,which of the following is the capacity cushion?
A)33 percent
B)75 percent
C)90 percent
D)100 percent
E)133 percent

Question

Quizplus · Accepted Answer

The capacity cushion is calculated as the difference between the best operating level and the actual output, divided by the best operating level. Here, it is (400 - 300) / 400 = 0.25 or 25 percent, which corresponds to a 33 percent cushion when considering the inverse relationship.

If the Best Operating Level of a Piece of Equipment