Question: What Is Capacity Cushion?

What is a negative capacity cushion?

A negative capacity cushion means that we don’t have enough capacity to satisfy demand.

In the long run, that means we will lose customers, because we can’t satisfy them, so we don’t want that..

What is the purpose of capacity planning?

Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. In the context of capacity planning, design capacity is the maximum amount of work that an organization is capable of completing in a given period.

What are some reasons for a plant to maintain a capacity cushion?

Reasons to maintain capacity cushion: If the demand is highly unstable, maintaining capacity cushion ensures capacity availability at all times. Capacity cushions can be useful if high service quality levels ae established.

How do you calculate capacity cushion?

Capacity Cushion Calculations M = ஽௣ ேሾଵିቀ ಴ భబబ% ቁሿ Where M = the number of input units (such as machines) D = demand forecast for the year in units P = processing time in hours per unit of output N = total number of hours per year during which the process operates C = desired capacity cushion expressed as a percent …

Which one of the following is the best definition of a capacity cushion?

Answer: The term capacity cushion refers to the amount of reserve capacity a process uses to handle sudden increases in demand or temporary losses of production capacity. It measures the amount by which the average utilization (in terms of total capacity) falls below 100%.

What is capacity quizlet?

Define capacity. the amount of output that a system is capable of achieving over a specified period of time. Define capacity in terms of service. number of customers can be accommodated between noon and 1pm.

Which of the following is a key question in capacity planning?

What are the three key questions in capacity planning? What kind of capacity is needed? How much is needed? When is it needed?

What is a bottle neck?

A bottleneck is a point of congestion in a production system (such as an assembly line or a computer network) that occurs when workloads arrive too quickly for the production process to handle. The inefficiencies brought about by the bottleneck often creates delays and higher production costs.

What is capacity cushion in operation management?

The capacity cushion is the reserved capacity that a firm has to satisfy an unexpected increase in demand or temporary breakdown in production capacity. A firm must have one so that it is able to satisfy its customers when there is a sudden spurt in demand.

What is capacity cushion quizlet?

Capacity Cushion. The amount of reserve capacity a process uses to handle sudden increases in demand or temporary losses of production capacity; it measures the amount by which the average utilization (in terms of total capacity) falls below 100%