Which of the Following Statements About the Theory of Constraints

question 100

Multiple Choice

Which of the following statements about the theory of constraints is (are) true?
(A) The theory of constraints focuses on determining the optimal product mix when two or more resources restrict the attainment of a goal or objective.
(B) The theory of constraints focuses on maximizing the rate of throughput contribution while maximizing investment and other operating costs.

• A) Only A
• B) Only B
• C) Neither of these is true.
• D) Both of these are true.

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Definitions:

Average Variable Cost

Average Variable Cost is the total variable costs (costs that vary with production levels) divided by the quantity of output produced.

Profit-Maximizing

A strategy or point where a firm achieves the highest possible profit given its production costs and market conditions, often where marginal cost equals marginal revenue.

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical, allowing for slight differentiation and some pricing power.

Fixed Costs

Costs that do not change with the level of output or activity, such as rent or salaries.