Where Several Products Are Produced and There Is a Scarce

question 10

Multiple Choice

Where several products are produced and there is a scarce factor, the rule for deciding on the optimum product mix is:

• A) produce equal quantities of all products.
• B) produce as much as can be sold of the product with the highest contribution margin per unit of scarce factor and use any remaining resource to produce the product with the next highest contribution margin per unit of scarce factor etc.
• C) produce only the product with the highest contribution margin.
• D) produce only the product with the highest contribution margin per unit of scarce factor.

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Definitions:

Average Time

The mean time taken to complete a task or process, calculated by summing all the recorded times and dividing by the number of observations.

Arrival Rate

The frequency at which entities (e.g., customers, data packets) arrive at a specific point within a system or process.

Poisson Distribution

A distribution of probabilities indicating the likelihood of a certain number of occurrences within a specified time or space interval.

Exponential Distribution

A probability distribution used to model the time between events in a process where events occur continuously and independently at a constant average rate.