The type of strategy used with respect to the amount of capacity cushion when "the cost or consequence of running out is approximately in balance with the cost of excess capacity" is called:
A)Small cushion
B)Large cushion
C)Moderate cushion
D)None of the above

Question

Quizplus · Accepted Answer

This is known as a moderate cushion strategy where the cost of running out and the cost of excess capacity are approximately equal. This strategy strikes a balance between the two costs and ensures that the company has enough capacity to meet demand without incurring excessive costs.

The Type of Strategy Used with Respect to the Amount