Question

Harlose Suits owns more equipment than required for manufacturing goods during periods of regular demand in order to tackle sudden demand surges. It also has a certain reserve of produced goods to tackle material shortages. In this case, the reserve of equipment and produced goods are examples of _____.

Answer 1

Answer:

Harlose Suits owns more equipment than required for manufacturing goods during periods of regular demand in order to tackle sudden demand surges. It also has a certain reserve of produced goods to tackle material shortages. In this case, the reserve of equipment and produced goods are examples of the capacity cushion.

Explanation:

The capacity cushion is the amount of reserve capacity that a business keeps to manage sudden increases of demand or momentarily losses of production capacity.