Western Governors University (WGU) MGMT6020 C215 Operations Management Practice Exam

Capacity cushions refer to the extra capacity that an organization maintains above its expected peak demand. This surplus capacity is crucial for providing flexibility and responsiveness to fluctuations in demand. By having a capacity cushion, a business can accommodate unexpected increases in demand or variations in production schedules, which helps in preventing stockouts and maintaining customer satisfaction. Maintaining a capacity cushion allows companies to be agile in their operations and can serve as a buffer against uncertainties in the market. It helps in managing risks and can often lead to improved service levels. This approach is particularly important in industries where demand can be unpredictable or when launching new products, as having this extra capacity can facilitate quicker scaling. In contrast, the other options do not accurately capture the concept of capacity cushions. Regular output requirements refer to the standard operational levels, measures of employee performance focus on individual productivity metrics rather than capacity management, and underutilized resources do not equate to the proactive nature of maintaining a cushion for flexibility. Each of these alternatives misses the critical aspect of readiness and adaptability that capacity cushions provide within operations management.