What Is the Capacity Cushion and How Is It Significant

question 69

Essay

What is the capacity cushion and how is it significant for managing processes?

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Definitions:

Fixed Costs

Costs that remain constant regardless of the level of production or output, such as rent, salaries, and loan repayments.

Maximum Amounts

The highest allowable or possible quantity or number in a given set of circumstances or regulations.

Variable Costs

Expenses that vary in relation to the amount of activity or production volume within a company.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.