What is one reason businesses utilize a "capacity cushion"?

Businesses utilize a "capacity cushion" primarily to adapt to unexpected spikes in demand. A capacity cushion refers to the amount of extra capacity a business maintains beyond its regularly projected requirements. This additional capacity is crucial for handling sudden increases in demand that can arise from various factors such as seasonal trends, promotions, or market changes.

When demand exceeds expectations, a capacity cushion allows a company to respond quickly without compromising service levels or product availability. This flexibility is particularly important in industries where customer satisfaction and timing are critical. By having this cushion, businesses can accommodate fluctuations without the need for immediate capital investments or rapid ramp-up of operations, which could take time and resources to implement.

While the other choices refer to valid aspects of operations management, they do not directly address the primary function of a capacity cushion as effectively as the ability to adapt to unexpected demand changes. For instance, reducing inventory, eliminating overtime, or streamlining operations may be influenced by overall capacity management but do not focus on the specific advantages that a capacity cushion provides in managing demand volatility.