A Bottleneck

question 27

Multiple Choice

A bottleneck:

• A) Is not a capacity constraint
• B) Has an opportunity cost of lost revenue from unmet demand
• C) Is unrelated to capacity
• D) Cannot be used efficiently

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Definitions:

Indirect Labor

Labor costs associated with employees who assist in the production process but do not work directly on the product, like maintenance staff or supervisors.

Factory Utilities

Costs associated with the utilities consumed in the production process, such as electricity, gas, and water.

Overhead Allocation Base

A measure or criteria used to distribute indirect costs to various products, services, or departments based on their usage or consumption.

Direct Labor Hours

The total time workers spend producing a product or performing a specific service, directly contributing to the output.