Which one of the following statements concerning capacity cushions is best?
A) Capacity cushions are used primarily in manufacturing organizations, not in service organizations.
B) Large- capacity cushions are utilized more often when future demand is level and known.
C) Small cushions are used in organizations where the products and services produced often change.
D) Small- capacity cushions are used extensively in capital- intensive firms.

Question

Quizplus · Accepted Answer

Small-capacity cushions are used extensively in capital-intensive firms because these firms have high fixed costs and aim to maximize utilization to spread these costs over as many units as possible.

Which One of the Following Statements Concerning Capacity Cushions Is