Which One of the Following Statements Concerning Capacity Cushions Is

question 119

Multiple Choice

Which one of the following statements concerning capacity cushions is best?

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

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Definitions:

Price Elasticity

A measure of how sensitive the quantity demanded of a good or service is to a change in its price.

Price Sensitivity

The degree to which the price of a product affects consumers' purchasing behaviors.

Core Product

The fundamental benefit or solution that a customer receives from a product or service, which defines its primary value.

Commoditization

The process by which goods or services become undifferentiated in the eyes of the consumer, leading to competition primarily on price.