A Constraint with Positive Slack or Surplus Is Called a

question 94

Multiple Choice

A constraint with positive slack or surplus is called a

• A)nonbinding constraint.
• B)resource constraint.
• C)binding constraint.
• D)nonlinear constraint.
• E)linear constraint.

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Definitions:

Shortage Costs

Costs incurred when the demand for a product exceeds the supply available, potentially including lost sales, expedited shipping fees, and lower customer satisfaction.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell it to customers, and collect the cash from the sale.

Cash Cycle

The period between the outlay of cash for the purchase of inventory and the receipt of cash from accounts receivable, reflecting how quickly a company can convert its products into cash through sales.

Restrictive Financial Policies

Policies put in place to limit certain actions by the firm, often to maintain financial stability or to comply with regulatory requirements.